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Gold prices holding solid gains as U.S. consumer confidence falls to 100.2 in November

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(Kitco News) - American consumer confidence index fell to 100.2 in November, down from October's reading of 102.5, the U.S. Conference Board reported Tuesday. Economists were expecting to see the index at 100.

The report noted broad-based weakness in U.S. consumer sentiment. The Present situation index fell to a reading of 137.4m, down from October's reading of 138.9. At the same time, the Expectations Index fell to 75.4, down from the previous reading of 78.1.

"Consumer confidence declined again in November, most likely prompted by the recent rise in gas prices," said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.

"The Present Situation Index moderated further and continues to suggest the economy has lost momentum as the year winds down. Consumers' expectations regarding the short-term outlook remained gloomy. Indeed, the Expectations Index is below a reading of 80, which suggests the likelihood of a recession remains elevated," Franco added.

Not only do U.S. consumers see weaker economic growth in the U.S., but they also expect inflation to remain persistently high. The report said that one-year inflation expectations rose to 7.2%, up from the previous reading of 6.9%.

"Inflation expectations increased to their highest level since July, with both gas and food prices as the main culprits. Intentions to purchase homes, automobiles, and big-ticket appliances all cooled. The combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth into early 2023," Franco said.

The gold market is not seeing much reaction to the latest economic data. February gold futures last traded at $1,765.40 an ounce, up 0.58% on the day.

Adam Button, chief market strategist at noted that the Expectations Index pushing deeper into recession territory will continue to put pressure on the Federal Reserve's monetary policy.

"Everything is pointing to a slowdown in activity/inflation, but how hard do they continue to press on the brakes until it actually materializes? The problem is that if they press too hard for too long, they'll manufacture an unnecessary recession," he said.

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