(Kitco News) - The gold market is trading higher ahead of the weekend after the latest data showed consumer sentiment in the U.S. improving, while near- and longer-term inflation expectations ticked lower.
The University of Michigan announced on Friday that the preliminary reading of its Consumer Sentiment survey for December was 53.3. The data was better than expectations, as the consensus forecast of economists called for a reading of 52, and it was also better than November’s final reading of 51.
“Consumer sentiment lifted 2.3 index points in early December, within the margin of error,” said Surveys of Consumers Director Joanne Hsu. “This month’s increase was concentrated primarily among younger consumers.”
Gold prices were coming off their session highs following the 10 am EDT data release, with spot gold last trading at $4,235.42 per ounce for a gain of 0.63% on the day.
The components of the September index showed a mixed picture of consumer sentiment, with inflation expectations declining but several areas reflecting the ongoing impact of high prices.
“Overall, while views of current conditions were little changed, expectations improved, led by a 13% rise in expected personal finances, with improvements visible across age, income, education, and political affiliation, “Hsu noted. “Still, December’s reading on expected personal finances is nearly 12% below the beginning of the year. Similarly, labor market expectations improved a touch but remained relatively dismal. Consumers see modest improvements from November on a few dimensions, but the overall tenor of views is broadly somber, as consumers continue to cite the burden of high prices.”
Year-ahead inflation expectations decreased from 4.5% last month to 4.1% in December, the lowest reading since January 2025. “This marks four consecutive months of declines, but short-run inflation expectations are still above the 3.3% seen in January,” Hsu said.
Long-run inflation expectations also fell from 3.4% last month to 3.2% in December, matching the January 2025 reading. “In comparison, 2024 readings ranged between 2.8 and 3.2%, while the readings in 2019 and 2020 were below 2.8%,” she noted. “Inflation uncertainty over both time horizons—as measured by the interquartile range of responses—remains higher than January of this year.”
