Gold Prices Drop Slightly Following Strong U.S. Consumer Confidence Numbers
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(Kitco News) - Gold prices remain steady, but have fallen further from their session highs as U.S. consumer confidence rose stronger than expected in July
Tuesday, the U.S. Conference Board, said that its Consumer Confidence Index rose to a reading of 135.7, up from June’s revised reading of 121.5 and solidly beating expectations. According to consensus forecasts, economists were expecting a reading around 125.1.
The gold market is seeing a little selling pressure in reaction to the better-than-expected data, but prices still remain in positive territory.
Commodity analysts note that the market is laser focused on Wednesday’s Federal Reserve monetary policy decision. The central bank is expected to cut interest rates for the first time since 2008.
According to the Conference Board, July’s reading is the highest level for the year. They noted that June’s drop was due to rising trade tensions, which have since eased.
“Consumers are once again optimistic about current and prospective business and labor market conditions. In addition, their expectations regarding their financial outlook also improved,” said Lynn Franco, senior director of economic indicators at The Conference Board. “These high levels of confidence should continue to support robust spending in the near-term despite slower growth in GDP.”
Avery Shenfeld, senior economist at CIBC also said that he thinks the data bodes well for future economic growth.
“Americans went on a shopping spree in Q2, and if July's surge in the Conference Board consumer confidence poll means anything, they're not done yet,” he said.