(Kitco News) - The gold market is holding on to support above $4,100 an ounce but is unable to attract any safe-haven bid even as U.S. Consumer confidence falls more than expected.
The Consumer Confidence Index dropped to 88.7, down from October’s revised reading of 195.5, the Conference Board said Tuesday.
The data were weaker than expected, as economists had been looking for a relatively smaller decline to 93.5.
“Consumer confidence tumbled in November to its second lowest level since April after moving sideways for several months,” said Dana Peterson, Chief Economist, The Conference Board. “All five components of the overall index flagged or remained weak.”
The gold market is not seeing much reaction to the disappointing sentiment data. Spot gold last traded at $4,123.10 an ounce, down 0.27% on the day.
According to some economists, the disappointing sentiment data comes just days before the U.S. Thanksgiving holiday, which marks the start of the most important shopping season of the year. Traditionally, consumers spend more when they feel optimistic about the health of the economy.
Looking at the components of the report, the Present Situation Index—based on consumers’ assessment of current business and labor market conditions—fell by 4.3 points to 126.9. At the same time, the Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell by 8.6 points to 63.2.
“The Expectations Index has tracked below 80 for ten consecutive months, the threshold under which the gauge signals recession ahead,” Peterson said.
Along with falling sentiment, the report also noted inflation pressures remain elevated. Consumers’ average 12-month inflation expectations remained elevated in November, and the median rate increased to 4.8%.
