Gold Holds Gains After April U.S. Consumer Confidence Index Rises
Editor's Note: Updating earlier story with more details from report.
(Kitco News) - Gold held onto its earlier gains after a Conference Board report Tuesday showing that the U.S. consumer confidence index rose to 128.7 in April from a revised 127.0 in March.
Consensus expectations from most news organizations called for the confidence reading to be around 125.9 to 126.1.
As of 10:22 a.m. EDT, Comex June gold was trading up by $7.70 for the day to $1,331.70 an ounce. Two minutes ahead of a pair of mid-morning reports â€“ both stronger than forecast -- on consumer confidence and the sales of new homes, the metal was at $1,330.10.
“Consumer confidence increased moderately in April after a decline in March,” said Lynn Franco, director of economic indicators at The Conference Board. “Consumers’ assessment of current conditions improved somewhat, with consumers rating both business and labor market conditions quite favorably.
“Consumers’ short-term expectations also improved, with the percent of consumers expecting their incomes to decline over the coming months reaching its lowest level since December 2000 (6%). Overall, confidence levels remain strong and suggest that the economy will continue expanding at a solid pace in the months ahead.”
The present situation index increased from 158.1 to 159.6, while the expectations index improved from 106.2 last month to 108.1 this month, according to the report.
While higher, the headline confidence index was slightly below its previous peak, pointed out Andrew Grantham of CIBC.
“The main disappointment in last month's confidence report was the weakness in intentions to make major purchases, but all of those rebounded this month and actually more than corrected for the previous decline,” he said.
“The strong data won't be enough to alter expectations that GDP [gross-domestic-product] growth decelerated in Q1; however, they are further indicators that the economy appears to have picked up steam in the spring and Q2 should show stronger growth again.”