News Bites
Gold price holding steady as U.S. consumer confidence falls to 107.1 in January
(Kitco News) - The gold market continues to tread water with slight gains as optimism among consumers dropped more than expected in January.
American consumer confidence index fell to 107.1 in January, down from December’s revised reading of 109, the U.S. Conference Board reported Tuesday. According to consensus estimates, economists were looking for a reading around 109.1.
The disappointing data has provided some modest buying momentum in the gold market as traders have been reluctant to take any major positions ahead of the Federal Reserve’s monetary policy decision Wednesday. April gold futures last traded at $1,940.10 an ounce, roughly unchanged on the day.
The report said that the decline was due to a drop in consumers’ expected outlook. The Present Situation Index rose to 15.9, up from December’s reading of 147.4. At the same time the Expecations Index fell to a reading of 77.8, down from the previous level at 83.4.
“The Expectations Index is below 80 which often signals a recession within the next year,” the report said.
Ataman Ozyildirim, senior director of economics at The Conference Board, said that although confidence dropped in January, it remains above the lows seen last summer.
“Consumers were less upbeat about the short-term outlook for jobs. They also expect business conditions to worsen in the near term. Despite that, consumers expect their incomes to remain relatively stable in the months ahead. Meanwhile, purchasing plans for autos and appliances held steady, but fewer consumers are planning to buy a home—new or existing,” Ozyildirim said in the report.
The report also noted that consumers continue to worry about inflation, even as consumer prices remain down from their summer highs.
