(Kitco News) - The gold market is holding at session highs as rising inflation continues to take its toll on U.S. consumer confidence.
The Conference Board said on Tuesday its consumer confidence index fell to a reading of 102.5 this month, down from September’s reading at 107.8. The data significantly missed expectations as economists were looking for a reading of around 105.9.
““Notably, concerns about inflation—which had been receding since July—picked up again, with both gas and food prices serving as main drivers. Vacation intentions cooled; however, intentions to purchase homes, automobiles, and big-ticket appliances all rose. Looking ahead, inflationary pressures will continue to pose strong headwinds to consumer confidence and spending, which could result in a challenging holiday season for retailers,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board.
The gold market was seeing some renewed buying momentum ahead of the report and are holding on to its gains in initial reaction. December gold futures last traded at $1,664.70 an ounce, up 0.64% on the day.
Looking at the components of the report, The Present Situation Index dropped sharply to 138.9, down from September’s reading at 150.2. At the same time the Expectations Index dropped to 78.1, down from last month’s level at 79.5.
“The Present Situation Index fell sharply, suggesting economic growth slowed to start Q4. Consumers’ expectations regarding the short-term outlook remained dismal,” Franco said. “The Expectations Index is still lingering below a reading of 80—a level associated with recession—suggesting recession risks appear to be rising.”
