(Kitco News) – Gold prices are pushing into positive territory again following weaker than expected optimism among U.S. consumers.
Tuesday, the U.S. Conference Board said that its Consumer Confidence Index fell to a reading of 117.2, down from April’s revised reading of 117.5. The data missed expectations as economists were expecting a reading around 119.
Gold prices were trading in negative territory ahead of the report and have seen some positive price action in initial reaction to the data. June gold futures last traded at $1,896.30 an ounce, up more the 0.6% on the day.
The report noted that while consumers remain optimistic on the current state of the economy, they are not as optimistic about the future. The report said that the Present Situation index rose to a reading of 144.3, up from April’s reading of 131,9; Meanwhile the Expectations Index fell to a reading of 99.1, down from April’s reading of 107.9.
“Consumers’ assessment of present-day conditions improved, suggesting economic growth remains robust in Q2. However, consumers’ short-term optimism retreated, prompted by expectations of decelerating growth and softening labor market conditions in the months ahead. Consumers were also less upbeat this month about their income prospects—a reflection, perhaps, of both rising inflation expectations and a waning of further government support until expanded Child Tax Credit payments begin reaching parents in July,” said Lynn Franco, Senior Director of Economic Indicators at The Conference Board, in a statement.
“Overall, consumers remain optimistic, and confidence should remain resilient in the short term, as vaccination rates climb, COVID-19 cases decline further, and the economy fully reopens,” Franco added.
According to economists at CIBC, rising inflation pressure could be impacting consumer sentiment.
(By Neils Christensen)
