(Kitco News) - The gold market is trading near session highs after the latest data showed consumer sentiment in the U.S. declining, with inflation expectations shooting higher.
The University of Michigan announced on Friday that the preliminary reading of its Consumer Sentiment survey for September was 47.8. The data was far worse than expectations, as the consensus forecast of economists called for a reading of 51, and it was also well below August’’s final reading of 51.7.
“Consumer sentiment receded less than 4 index points for the second consecutive month of decreases,” said Surveys of Consumers Director Joanne Hsu. “Democrats and Republicans alike posted sizable declines, while independents were little changed from August. Year-ahead expectations for both personal finances and business conditions plunged. With a resurgence in fuel prices and trade tensions, consumers anticipate greater pressures on their pocketbooks to come.”
“Five-year expected business conditions remained stable at readings well below their historical average, suggesting that consumers believe that emerging risks this month may not have further worsened the long-run outlook,” she added. “Overall, sentiment is now 16% below February, prior to the start of the Iran conflict, and 13% lower than a year ago.”
Spot gold continued to trade near the upper edge of its daily range in the minutes following the 10 am ET data release, and last traded at $4,389.43 per ounce for a gain of 1.68% on the day.
The September index showed a sharp rise in year-ahead inflation expectations, while longer-run expectations also ticked higher.
“Year-ahead inflation expectations jumped from 4.0% last month to 4.6% this month, the highest reading since June,” 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 ticked up to 3.4%, ending three consecutive months at 3.3%. These expectations remain higher than their 2024 range of 2.8% to 3.2%.”
