(Kitco News) - The gold market may be below its fresh all-time high of $3,005 an ounce, but prices remain well-supported as consumer sentiment continues to weaken and inflation expectations rise, highlighting the growing threat of a stagflationary environment.
The University of Michigan announced on Friday that the preliminary reading of its Consumer Sentiment survey was 57.9 in March, down from February’s revised reading of 64.7. The data was significantly below expectations, as the consensus forecast of economists had called for a reading of 63.1.
According to the survey, consumer sentiment has dropped to its lowest level since November 2022.
“Sentiment has now fallen for three consecutive months and is currently down 22% from December 2024. While current economic conditions were little changed, expectations for the future deteriorated across multiple facets of the economy, including personal finances, labor markets, inflation, business conditions, and stock markets,” said Joanne Hsu, Director of Surveys of Consumers. “Many consumers cited the high level of uncertainty around policy and other economic factors; frequent gyrations in economic policies make it very difficult for consumers to plan for the future, regardless of one’s policy preferences.”
Along with souring sentiment, consumers continue to be worried about inflation. The report said that one-year inflation expectations rose to 4.9%, up from last month’s reading of 4.3%.
“This is the largest month-over-month increase seen since 1993, stemming from a sizable rise among Independents, and followed an already large increase in February,” the report said.
The gold market is not seeing much reaction to the latest survey data as investors focus on technical price action. Ahead of Friday’s trading session, spot gold prices rallied to an all-time high of $3,005.04 an ounce; however, the precious metal has seen consistent profit-taking since. Spot gold last traded at $2,981.30 an ounce, down 0.24% on the day.
