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Gold prices holding firm following rise in U.S. consumer confidence

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(Kitco News) - Gold prices are holding relatively steady as U.S. consumers appear to be slightly more upbeat in the new year than economists were expecting.

Tuesday, the U.S. Conference Board, said that its Consumer Confidence Index rose to a reading of 89.3, up from December’s revised reading of 87.1 and beating expectations. According to consensus forecasts, economists were expecting a reading around 88.9.

The gold market is not seeing much reaction to the latest economic data. April gold futures last traded at $1,860.30 an ounce, relatively unchanged on the day.

The report noted that consumer optimism is being drive by expectations. The Expectations Index rose to a reading of 92.5, up from December’s reading of 87.5. The present situation index fell to a reading of 84.4 in January, down from last month’s reading of 90.3.

Economists note that the rising optimism could be fragile as it appears consumers are upbeat on the idea of receiving a $1,400 check from the government. The payment is part of President Joe Biden’s proposed $1.9 trillion stimulus package, which appears to be hitting some roadblocks among Republican lawmakers.

“Although fast spreading variants of Covid continue to pose a downside risk, consumer sentiment should continue to be supported by prospects for greater fiscal stimulus ahead as vaccine roll out continues,” said Katherine Judge, senior economist at CIBC.

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