(Kitco News) - Gold prices are down 2% ahead of the weekend after the latest data showed consumer sentiment in the U.S. ticking up slightly after deteriorating beyond all expectations earlier this month, while inflation expectations and recession fears remain elevated.
The University of Michigan announced on Friday that the final reading of its Consumer Sentiment survey was 52.2 in April, higher than the preliminary reading of 50.8 but well below March’s final reading of 57. The preliminary data was far worse than expectations, as the consensus forecast of economists called for a 54.5 reading.
“Consumer sentiment fell for the fourth straight month, plunging 8% from March,” said Surveys of Consumers Director Joanne Hsu. “While the April decline in current conditions was modest, the expectations index plummeted with drop-offs in personal finances as well as business conditions. Expectations have fallen a precipitous 32% since January, the steepest three-month percentage decline seen since the 1990 recession. While this month’s deterioration was particularly strong for middle-income families, expectations worsened for vast swaths of the population across age, education, income, and political affiliation.”
The gold market is continuing to trade near the bottom of its daily range following the 10 am EST data release, with spot gold last trading at $3,281.51 per ounce for a loss of 2.01% on the day.
The components of the index showed very acute concern about the potential for higher inflation and recession in the coming years.
“Year-ahead inflation expectations surged from 5.0% last month to 6.5% this month, the highest reading since 1981 and marking four consecutive months of unusually large increases of 0.5 percentage points or more,” Hsu wrote. “[I]nflation expectations evolved with major trade policy announcements this month. After the April 9 partial pause in tariff increases, inflation expectations ebbed but remained substantially elevated relative to March. Long-run inflation expectations climbed from 4.1% in March to 4.4% in April, reflecting a particularly large jump among independents.”
