(Kitco News) - The gold market saw sharp gains after the latest data showed consumer sentiment in the U.S. declining further, while one-year inflation expectations shot to their highest level in two years.
The University of Michigan announced on Friday that the final reading of its Consumer Sentiment survey for March was 53.3. The data was worse than expectations, as the consensus forecast of economists called for a reading of 54, and it was also below the preliminary reading of 55.5 and February’s final reading of 56.6.
“Consumer sentiment fell back 6% this month to its lowest level since December 2025,” said Surveys of Consumers Director Joanne Hsu. “Declines were seen across age and political party. Consumers with middle and higher incomes and stock wealth, buffeted by both escalating gas prices and volatile financial markets in the wake of the Iran conflict, exhibited particularly large drops in sentiment.”
Gold prices shot higher in the wake of the 10 am EST data release, with spot gold last trading at $4,453.16 per ounce for a gain of 1.70% on the day.
The March index reflected a dramatic decline in future personal finances, while year-ahead inflation expectations rose to their highest level in a year.
“Overall, the short-run economic outlook plunged 14%, and year-ahead expected personal finances sank 10%, while declines in long-run expectations were more subdued,” Hsu wrote. “These patterns suggest that, at this time, consumers may not expect recent negative developments to persist far into the future. These views are subject to change, however, if the Iran conflict becomes protracted or if higher energy prices pass through to overall inflation. Interviews for this release were collected between February 17 and March 23, with about two-thirds completed after the start of the US military conflict in Iran.”
Year-ahead inflation expectations shot from 3.4% in February to 3.8% in March, the largest one-month increase since April 2025. “The current reading exceeds those seen in 2024 and remains well above the 2.3-3.0% range seen in the two years pre-pandemic,” Hsu noted. “Long-run inflation expectations inched down to 3.2%. In 2024, values ranged between 2.8% and 3.2%, while in 2019 and 2020, they were consistently below 2.8%. Note that for both time horizons, interviews completed after February 28th exhibited higher inflation expectations than those completed before that date.”
