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Gold holding near $1,850 an ounce following slightly better than expected U.S. consumer Confidence data

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(Kitco News) - Bullish momentum in the gold market is building as prices hold near a critical resistance point, even following better than expected U.S. consumer confidence.

Tuesday, U.S. Conference Board said that its consumer confidence index fell less than expected to 113.8 in January down from the 115.8 reading in December. The data was better than expected as the consensus forecast looked a reading around 111.4.

The gold market has fallen from its recent session highs but remains in striking distance of critical resistance at $1,850 an ounce. Spot gold last traded at $1,845.90 an ounce, up 0.15% on the day.

"Consumer confidence moderated in January, following gains in the final three months of 2021,” said Lynn Franco, senior director of economic indicators at The Conference Board, in the report. "The Present Situation Index improved, suggesting the economy entered the new year on solid footing. However, expectations about short-term growth prospects weakened, pointing to a likely moderation in growth during the first quarter of 2022.

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Looking at the components of the report, the present situation index rose to 148.2, up from December's reading of 144.8. At the same time the expectations index fell to 90.8, down from the previous reading at 95.4.

The report also noted that while inflation fears are easing, rising prices remains a major concern among consumers. The report also noted that the COVID-19 pandemic continues to weigh on consumer optimism.

"Concerns about inflation declined for the second straight month, but remain elevated after hitting a 13-year high in November 2021. Concerns about the pandemic increased slightly, amid the ongoing Omicron surge,” said Franco. "Looking ahead, both confidence and consumer spending may continue to be challenged by rising prices and the ongoing pandemic.”

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