(Kitco News) - The gold market continues to consolidate at elevated levels above $2,500 an ounce even as U.S. consumers feel a little more optimistic about the health of the economy.
On Tuesday, the U.S. Conference Board said its Consumer Confidence Index rose to 103.3 in August, up from July’s revised increase of 101.90. The data came in better than expected as economists forecasted a nearly unchanged reading at 100.90.
The gold market is not seeing much reaction to the latest economic data. December gold futures last traded at $2,547.20 an ounce, down 0.30% on the day.
The report noted broad-based optimism as recession fears continue to fade. The Present Situation Index – based on consumers’ assessment of current business and labor market conditions – rose to 134.4, compared to July’s reading of 133.1.
At the same time, The Expectations Index – based on consumers’ short-term outlook for income, business, and labor market conditions – rose to 82.5 in August.
The report noted that this is the second consecutive month that the Expectations Index has held above 80 points. Historically, readings below this threshold are seen as a recessionary signal.
“Overall consumer confidence rose in August but remained within the narrow range that has prevailed over the past two years,” said Dana M. Peterson, Chief Economist at The Conference Board in the report. “Consumers continued to express mixed feelings in August. Compared to July, they were more positive about business conditions, both current and future, but also more concerned about the labor market. Consumers’ assessments of the current labor situation, while still positive, continued to weaken, and assessments of the labor market going forward were more pessimistic.
Along with waning recession fears, the report noted that concerns around inflation are also fading. The average 12-month inflation expectations dropped to 4.9% in August, “the lowest since March 2020 and consistent with slower overall inflation and declines in some goods prices.”
