(Kitco News) - The gold market is trading at session highs ahead of the weekend after the latest data showed consumer sentiment in the U.S. declining more than expected, while longer-term inflation expectations rose higher once again..
The University of Michigan announced on Friday that the final reading of its Consumer Sentiment survey for September was 55.1, lower than the preliminary reading of 55.4 and well below August’s final reading of 58.2. The final data was also lower than expectations, as the consensus forecast of economists called for a 55.4 reading.
“Consumer sentiment confirmed its early-month reading and eased about 5% from last month but remains above the low readings seen in April and May of this year,” said Surveys of Consumers Director Joanne Hsu. “Although September’s decline was relatively modest, it was still seen across a broad swath of the population, across groups by age, income, and education, and all five index components. A key exception: sentiment for consumers with larger stock holdings held steady in September, while for those with smaller or no holdings, sentiment decreased.”
“This month, sentiment moved down about 9% for independents and 4% for Republicans, whereas it lifted this month for Democrats,” Hsu added. “Nationally, not only did macroeconomic expectations fall, particularly for labor markets and business conditions, but personal expectations did as well, with a softening outlook for their own incomes and personal finances. Consumers continue to express frustration over the persistence of high prices, with 44% spontaneously mentioning that high prices are eroding their personal finances, the highest reading in a year. Interviews this month highlight the fact that consumers feel pressure both from the prospect of higher inflation as well as the risk of weaker labor markets.”
The gold market is setting fresh session highs following the 10 am EDT data release, with spot gold last trading at $3,770.09 per ounce for a gain of 0.55% on the day.
Near-term inflation expectations ticked lower, but rose once again on the longer end in September.
“Year-ahead inflation expectations receded slightly to 4.7% from 4.8% last month,” the report noted. “Long-run inflation expectations moved up for the second straight month to 3.7% in September, but stand much lower than the 4.4% spike seen in April.
