Spot Gold Moves Above $2,400 Per Ounce As U.S. Consumer Confidence Improves In July

(July 30, 2024 - Ernest Hoffman)

(Kitco News) - The gold market is holding steady after the latest data showed U.S. consumer sentiment beating expectations this month.

The Consumer Confidence Index rose to 100.3 in July, above economists’ consensus forecast for a 99.7 reading and also above the downwardly revised 97.8 print in June, the Conference Board said on Tuesday.

The Present Situation Index - based on consumers’ assessment of current business and labor market conditions - declined to 133.6 from 135.3 last month, the report said. Meanwhile, the Expectations Index - based on consumers’ short-term outlook for income, business, and labor market conditions - improved to 78.2 in July, up from 72.8 in June but still below the 80 threshold which usually signals a recession ahead.

“Confidence increased in July, but not enough to break free of the narrow range that has prevailed over the past two years,” said Dana M. Peterson, Chief Economist at The Conference Board. “Even though consumers remain relatively positive about the labor market, they still appear to be concerned about elevated prices and interest rates, and uncertainty about the future; things that may not improve until next year.”

Gold prices are holding steady following the consumer sentiment data, with spot gold last trading at from $2,405.62 at the time of writing for a gain of 1.02% on the session.

Average 12-month inflation expectations remained stable at 5.4 percent in July, compared to a peak of 7.9 percent reported in 2022, the Conference Board said. The share of consumers expecting higher interest rates over the next 12 months dropped for the second month in a row to 50.3 percent - the lowest since February 2024.

“The proportion of consumers predicting a forthcoming recession ticked up in July but remains well below the 2023 peak,” Peterson added. “Consumers’ assessments of their Family’s Financial Situation - both currently and over the next six months - was less positive. Indeed, assessments of familial finances have deteriorated continuously since the beginning of 2024.”

July’s write-in responses showed that “elevated prices, especially for food and groceries, and inflation (the rate of change in prices), remain the key drivers of consumers’ views of the economy, followed by the US political situation and the labor market,” the report noted. “Mentions about the forthcoming elections increased, although the share of respondents believing the 2024 election would impact the economy was lower than write-ins from July 2016.”