Gold Prices Remain Down As Consumer Confidence Remains At Historic Levels
(Kitco News) - The gold market remains under pressure as U.S. consumer confidence remains at elevated levels.
Tuesday, the U.S. Conference Board, said that is Consumer Confidence Index increased to a reading of 128, up slightly from April's revised reading of 125.6. The data was relatively in line with expectations as consensus forecasts were calling a reading around 128.2.
Gold prices were hovering just above session lows ahead of the data and remain at current levels in initial reaction to the numbers. June gold futures last traded at $1,294 an ounce, down 0.71% on the day.
The data shows the gains in consumer confidence came from substantial gains in the present outlook. The report said that The Present Situation Index increased to 161.7 from 157.5; meanwhile, the Expectations Index rose to 105.6 in May from 104.3 last month.
"Consumers' assessment of current conditions increased to a 17-year high (March 2001, 167.5), suggesting that the level of economic growth in Q2 is likely to have improved from Q1," said Lynn Franco, Director of Economic Indicators at The Conference Board. "Consumers' short-term expectations improved modestly, suggesting that the pace of growth over the coming months is not likely to gain any significant momentum. Overall, confidence levels remain at historically strong levels and should continue to support solid consumer spending in the near-term."
The outlook for the labor market is mixed. The report noted that among is survey participants, The percentage of consumers stating jobs are "plentiful" improved to 42.4% from 38.2%, while those claiming jobs are "hard to get" also increased to 15.8%, from 15.5%.
Andrew Grantham, senior economist at CIBC Markets, said that the uptrend in consumer confidence, albeit a gradual trend, continues to bode well for economic growth. However, he added that potential threat of rising interest rates could be creating some hesitant sentiment among consumers.