(Kitco News) - The gold prices continue to hold near their session highs above $3,000 an ounce as consumer confidence continues to drop precipitously, raising further concerns that the U.S. economy is headed toward a recession.
The Consumer Confidence Index dropped to 92.9, down from February’s revised reading of 100.0, the Conference Board said Tuesday.
The data were weaker than expected, as economists had been looking for a shallower decline to 94.2.
Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board, said in the report that this is the fourth consecutive decline in consumer optimism. She also noted that sentiment has dropped below the narrow range established over the last three years.
“Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low. Meanwhile, consumers’ optimism about future income—which had held up quite strongly in the past few months—largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations,” Guichard said.
The gold market is not reacting significantly to the disappointing sentiment data. Spot gold last traded at $3,030.90 an ounce, up 0.64% on the day.
Looking at the components of the report, the Present Situation Index dropped to 134.5. However, the biggest drop was in the Expectations Index, which fell to 65.2, the lowest level in 12 years.
The report noted that a reading below 80 points traditionally signals an impending recession.
The report also noted that inflation fears remain elevated. One-year inflation expectations rose to 6.2%, up from 5.8% reported last month.
“The share of consumers expecting higher interest rates over the next 12 months increased to 54.6% from 52.6% in February, while the share of consumers expecting lower interest rates dropped further to 22.4% from 24.1%,” the report said. “Write-in responses also showed that inflation is still a major concern for consumers and that worries about the impact of trade policies and tariffs in particular are on the rise.”
