(Kitco News) - The gold market is holding near session highs as bargain hunting and dismal economic data help support prices after they fell to a fresh nine-week low overnight.
American consumer confidence index fell to 102.9 in February, down from January’s revised reading of 106, the U.S. Conference Board reported Tuesday. According to consensus estimates, economists were looking for a reading around 108.50
The gold market was benefiting from some technical buying momentum but the weaker-than-expected data is helping to solidify the bullish momentum. April gold futures last traded at $1,831.70 an ounce, up 0.37% on the day.
The report said that the decline in consumer confidence was due to a further decline in expected future economic conditions. The report said that the Present Situation Index increased to 512.8, up from January’s reading of 151.1. However, the Expectations Index dropped to 69.7, down from the previous reading at 76.
“Notably, the Expectations Index has now fallen well below 80—the level which often signals a recession within the next year. It has been below this level for 11 of the last 12 months,” the report said.
Although inflation pressures have dropped from the 40-year highs seen last summer, the report noted that persistently elevated prices are taking their toll on consumers.
“While 12-month inflation expectations improved—falling to 6.3 percent from 6.7 percent last month—consumers may be showing early signs of pulling back spending in the face of high prices and rising interest rates,” said Ataman Ozyildirim, Senior Director, Economics at The Conference Board, in the report. “Fewer consumers are planning to purchase homes or autos and they also appear to be scaling back plans to buy major appliances. Vacation intentions also declined in February.”
