(Kitco News) - Although the gold market continues to see some selling pressure, the price is holding support above $2,400 an ounce, supported by falling consumer sentiment and inflation expectations.
Friday, the University of Michigan said the preliminary reading of its Consumer Sentiment Index fell to 66.0, down from the revised June reading of 68.2. The data came in weaker than expected, as economists were looking for a roughly unchanged reading at 68.5.
While the data came in weaker than expected, the report noted that the drop is not statistically significant. Sentiment continues to consolidate within a multi-year trend.
“Although sentiment is more than 30% above the trough from June 2022, it remains stubbornly subdued,” said Surveys of Consumers Director Joanne Hsu in the report.
The gold market continues to see some profit-taking after hitting a six-week high above $2,400 an ounce Thursday; however, the price continues to hold that new resistance level. August gold futures last traded at $2,422.30 an ounce, down 0.44% on the day.
While inflation expectations remain relatively elevated, they continue to drop. The report said that consumers see inflation rising 2.9% in the next 12 months, down from 3.0% reported in June.
“In comparison, these expectations ranged between 2.3 to 3.0% in the two years prior to the pandemic. Long-run inflation expectations came in at 2.9%, down from 3.0% last month and remaining remarkably stable over the last three years. These expectations remain somewhat elevated relative to the 2.2-2.6% range seen in the two years pre-pandemic,” said Hsu.
