(Kitco News) - The gold market is trading not far from session highs after the latest data showed consumer sentiment in the U.S. declining further, with inflation expectations rising higher.
The University of Michigan announced on Friday that the preliminary reading of its Consumer Sentiment survey for October was 46.3. The data was worse than expectations, as the consensus forecast of economists called for a reading of 47.6, and it was also well below September’s final reading of 48.1.
“Consumer sentiment was little changed this month, inching down a scant 1.8 index points from September,” said Surveys of Consumers Director Joanne Hsu. “While year-ahead expectations for personal finances and business conditions crept up slightly, buying conditions for durables plummeted amid high prices and borrowing costs. Increases in sentiment among Democrats and Republicans were offset by a decline among independents this month.”
“Overall, sentiment for lower-income consumers and those with smaller stock portfolios dropped steeply this month, groups that have fewer resources to weather increases in prices,” she added. “Frustration over cost-of-living continues to mount, as consumers across the political spectrum believe that the trajectory of the economy has weakened since the beginning of the year.”
Spot gold continued to trade near the upper edge of its daily range in the minutes following the 10 am ET data release, and last traded at $4,188.36 per ounce for a gain of 1.32% on the day.
The October index showed another rise in year-ahead inflation expectations, while longer-run expectations also ticked higher.
“Year-ahead inflation expectations ticked up from 4.6% last month to 4.7% this month,” Hsu wrote. “The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings. Long-run inflation expectations also stepped up from 3.4% in September to 3.5%, notably higher than their 2024 range of 2.8% to 3.2%. Inflation expectations over both time horizons increased for the second straight month to their highest readings since May."
