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Gold prices holding above $1,950 an ounce as U.S. consumer confidence falls less than expected to 102.3
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(Kitco News) - The gold market is holding on to modest gains around $1,950 an ounce as sentiment among U.S. consumers remains resilient.
American consumer confidence index fell to 102.3 in May, down from April’s upwardly revised reading of 103.70, the U.S. Conference Board reported Tuesday. The data came in better than expected; according to consensus estimates, economists were looking for sentiment to drop to 99.1.
Although report noted that while U.S. consumers are maintaining an upbeat attitude, their expectations remain fairly pessimistic.
The gold market is not seeing much reaction to the latest economic data. June gold futures last traded at $1,954.40 an ounce, up 0.52% on the day.
Looking at the components of the report, the Present Situation Index fell to 148.6 from last month’s reading at 151.80. At the same time the Expectations Index dropped to 71.5, down from the previous level of 71.7.
“The Expectations Index has now remained below 80—the level associated with a recession within the next year—every month since February 2022, with the exception of a brief uptick in December 2022,” the report said.
Ataman Ozyildirim, senior director, Economics at The Conference Board, said that the outlook for the labor market is starting to deteriorate.
“Their assessment of current employment conditions saw the most significant deterioration, with the proportion of consumers reporting jobs are ‘plentiful’ falling 4 ppts from 47.5 percent in April to 43.5 percent in May. Consumers also became more downbeat about future business conditions, weighing on the expectations index. However, expectations for jobs and incomes over the next six months held relatively steady,” he said.
Although inflation expectations remain elevated, Ozyildirim said that they are starting to stabilize.
“Consumers in May expected inflation to average 6.1 percent over the next 12 months—essentially unchanged from 6.2 percent in April, though down substantially from the peak of 7.9 percent reached last year. Nonetheless, consumers continued to view inflation as a major influence on their view of the US economy,” he said.
