(Kitco News) - Gold prices continue to see consecutive record highs with its current momentum supported by a drop in consumer optimism.
On Tuesday, the U.S. Conference Board said its Consumer Confidence Index dropped to 98.7 in September, down from August’s revised reading of 105.6. The data was significantly weaker than expected, as economists forecasted a nearly unchanged reading of 103.9.
Gold prices have caught a modest bullish bid in their initial reaction to the disappointing sentiment data. December gold futures last traded at $2,661.50 an ounce, up 0.34% on the day.
According to the report, the decline in headline sentiment was broad-based and led by a sharp drop in near-term confidence. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell by 10.3 points to 124.3. Meanwhile, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—declined by 4.6 points to 81.7, but remained above 80.
““Consumer confidence dropped in September to near the bottom of the narrow range that has prevailed over the past two years. September’s decline was the largest since August 2021 and all five components of the Index deteriorated. Consumers’ assessments of current business conditions turned negative while views of the current labor market situation softened further. Consumers were also more pessimistic about future labor market conditions and less positive about future business conditions and future income,” said Dana M. Peterson, Chief Economist at The Conference Board in the report.
“The drop in confidence was steepest for consumers aged 35 to 54. As a result, on a six-month moving average basis, the 35–54 age group has become the least confident while consumers under 35 remain the most confident,” Peterson added.
