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(Kitco News) - The gold market continues to spin its wheels, with prices trading just below $1,950 an ounce as line consumer sentiment and roughly unchanged inflation expectations provide investors and traders with little guidance.
Friday, the University of Michigan said the preliminary reading of its Consumer Sentiment Index fell to 71.2 from the July reading of 71.6. The data was roughly aligned with expectations, calling for a drop to 71.4.
"Sentiment is now about 42% above the all-time historic low reached in June of 2022 and is approaching the historical average reading of 86. In general, consumers perceived few material differences in the economic environment from last month, but they saw substantial improvements relative to just three months ago," the report said.
Gold remains fairly directionless as the sentiment data is unable to provide any decisive outlook on the health of the economy. December gold futures last traded at $1,949.80 an ounce, roughly unchanged on the day.
While consumer optimism remains healthy, inflation expectations also remain fairly well anchored. According to the survey, consumers see inflation rising 3.3% by August 2023, down a tick from last month's estimate of 3.4%.
The survey noted that inflation expectations have been fairly stable for the last three months, trending sideways in a broader long-term channel.
"The current reading remains above the 2.3-3.0% range seen in the two years prior to the pandemic. Long-run inflation expectations also remained stable at 2.9%, again staying within the narrow 2.9-3.1% range for 24 of the last 25 months," the report said.
Although inflation expectations remain anchored, some analysts note that they still remain above the Federal Reserve's target of 2%. The report noted that inflation expectations remain above pre-pandemic levels.
