Gold Prices Holding Steady As U.S. Consumer Optimism Falls To Nearly 2-Year Low
(Kitco News) - The gold market is holding on to strong gains, and seeing little reaction as U.S. consumers feel less optimistic in June.
Tuesday, the U.S. Conference Board, said that its Consumer Confidence Index fell to a reading of 121.5, down from May's reading of 134.10 and missing expectations. According to consensus forecasts, economists were expecting a reading around 132.0.
According to the report, this is the lowest reading since September 2017.
The gold market is seeing little reaction to the weaker-than-expected data. However, disappointing consumer sentiment could continue to weigh on economic growth expectations and support further rate cuts from the Federal Reserve, according to some economists.
August gold futures last traded at $1,435.90 an ounce, up 1.25% the day.
The report showed broad-based weakness with the Present Situation Index falling to 162.60, down from May’s reading of 170.7. Meanwhile, the Exaptation Index dropped to 94.1, down from the previous level of 105.
The Conference board also warned that consumer sentiment could fall further as the trade tensions between the U.S. and China escalate.
“The decrease in the Present Situation Index was driven by a less favorable assessment of business and labor market conditions. Consumers’ expectations regarding the short-term outlook also retreated,” said Lynn Franco, senior director of economic indicators at The Conference Board. “The escalation in trade and tariff tensions earlier this month appears to have shaken consumers’ confidence. Although the Index remains at a high level, continued uncertainty could result in further volatility in the Index and, at some point, could even begin to diminish consumers’ confidence in the expansion.”