(Kitco News) - The gold market is trading near session lows after the latest data showed consumer sentiment in the U.S. improving, with shorter-term inflation expectations easing.
The University of Michigan announced on Friday that the final reading of its Consumer Sentiment survey for July was 55.2. The data was better than expectations, as the consensus forecast of economists called for a reading of 54. It was also better than the preliminary reading of 54.4, and well above June’s final reading of 49.5.
“Consumer sentiment confirmed its early-month reading, landing almost 12% above June,” said Surveys of Consumers Director Joanne Hsu. “Broad-based improvements were seen across all groups by income, education, wealth, age, and political party. Five-year expected business conditions reached a 12-month high, though it remains well under its historical average. Despite recent gains, sentiment is 11% below a year ago, reflecting a generally somber view of the economy amid five years of elevated inflation and persistent high prices. Consumers remain focused on pocketbook issues like purchasing power, while political or military developments remain more in the background.”
Spot gold fell to a fresh session low of $4,022.13 in the minutes before the 10 am ET data release, and last traded at $4,029.51 per ounce for a loss of 1.80% on the day.
The July index showed a drop in year-ahead inflation expectations, while longer-run expectations held steady, though these remained high by historical standards.
“Year-ahead inflation expectations ticked down from 4.6% in June to a still-elevated 4.2% this month,” Hsu wrote. “The current reading substantially exceeds the 3.4% seen in February before the Iran conflict began, along with all 2024 readings. Long-run inflation expectations held steady from last month at 3.3%, remaining a bit higher than the 2.8% to 3.2% range seen in 2024.”
