(Kitco News) - The gold market is trading near key support after the latest data showed consumer sentiment in the U.S. holding steady, while inflation expectations rose higher.
The University of Michigan announced on Friday that the final reading of its Consumer Sentiment survey for October was 48. The data was better than expectations, as the consensus forecast of economists called for a reading of 46.3, the same as the preliminary reading, and it was also just below September’s final reading of 48.1.
“Consumer sentiment held steady this month, registering a scant one-tenth of an index point below September,” said Surveys of Consumers Director Joanne Hsu in the report. “Increases in sentiment among Republicans and Democrats were balanced by declines among independents. While year-ahead business conditions improved about 14%, they stand 16% less than last October’s read.”
“This month’s decline in the Current Conditions subindex was driven entirely by buying conditions for durables, which plunged 18% on the basis of higher interest rates and rising concerns about the affordability of such purchases,” she added. “Purchasing power continues to dominate consumer views of the economy. Sentiment is now 10% below a year ago and 15% less than February, just prior to the Iran conflict.”
Spot gold continued to trade near the $4,000 support level in the minutes following the 10 am ET data release, and last traded at $4,014.71 per ounce for a gain of 0.24% on the day.
The final October reading showed another rise in year-ahead inflation expectations, while longer-run expectations also ticked higher.
“Year-ahead inflation expectations ticked up from 4.6% last month to 4.7% this month,” Hsu noted. “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 also stepped up from 3.4% in September to 3.5%, notably higher than their 2024 range of 2.8% to 3.2%. Inflation expectations over both time horizons increased for the second straight month to their highest readings since May.”
