Gold prices continues to struggle near $1,800 as UofM consumer sentiment drops to 59.1
(Kitco News) - The gold market continues to struggling, trading below $1,800 an ounce, and is unable to find any support from weak consumer confidence, according to the latest report from the University of Michigan.
Friday, the University of Michigan said the preliminary reading of its Consumer Sentiment Index dropped to 59.7, down from the previous reading of 65.2. the data missed expectations as consensus forecasts were calling a small drop to 64.1.
“These declines were broad based--for current economic conditions as well as consumer expectations, and visible across income, age, education, geography, and political affiliation--continuing the general downward trend in sentiment over the past year,” the report said.
According to the report, consumers' assessment of their current financial situation relative to a year ago is at its lowest reading since 2013.
Economists have noted that rising inflation pressures is having a significant impact on consumer sentiment as rising prices dimmish purchasing power.
“Much of the weakness in the U. Mich. measure of sentiment is directly linked to higher inflation, with consumers reporting that it is the worst time to buy durable goods since the late-1970s,” said Michael Pearce, senior U.S. economist at Capital Economics.
Although sentiment data is weaker than expected, the report noted that one-year inflation expectations are holding steady albeit at an elevated level of 5.4%.
The gold market is not seeing much reaction to the data as it continues to be hit with significant selling pressure. June gold futures last traded at $1,808.60 an ounce, down 0.82% on the day.