Spot Gold Steady Near $2,625/oz As U.S. Consumer Confidence Rises To 111.7 In November

(November 26, 2024 - Ernest Hoffman)

(Kitco News) - Gold prices are holding steady after the latest data showed U.S. consumer sentiment improving as expected this month.

The Consumer Confidence Index rose to 111.7 in November, in line with economists’ consensus forecast for a 111.6 reading and above the upwardly revised 109.6 print in October, the Conference Board said on Tuesday.

The Present Situation Index, based on consumers’ assessment of current business and labor market conditions, increased by 4.8 points to 140.9, while the Expectations Index, based on consumers’ short-term outlook for income, business, and labor market conditions, edged up 0.4 points to 92.3, well above the threshold of 80 that usually signals a recession ahead.

Gold prices held steady near flat on the day following the consumer sentiment data, with spot gold ticking up from $2,623 in the minutes before the 10 am EST release to $2,624.71 per ounce at the time of writing for a loss of 0.3% on the session.

“Consumer confidence continued to improve in November and reached the top of the range that has prevailed over the past two years,” said Dana Peterson, Chief Economist at The Conference Board. “November’s increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding the labor market. Compared to October, consumers were also substantially more optimistic about future job availability, which reached its highest level in almost three years. Meanwhile, consumers’ expectations about future business conditions were unchanged and they were slightly less positive about future income.”

The proportion of consumers anticipating a recession over the next 12 months declined further in November and is now at its lowest level since the question was first asked in July 2022. “Consumers’ assessments of their Family’s Current Financial Situation fell slightly but optimism for their finances over the next six months reached a new high,” Peterson said.

Consumers also became more optimistic about the stock market. “56.4% of consumers expected stock prices to increase over the year ahead, another record high for this measure. Only 21.3% expected stock prices to decline,” she wrote. “The share of consumers expecting higher interest rates over the next 12 months declined to 43.6%. The share expecting lower rates increased to 34.6%, the highest since April 2020.

Meanwhile, average 12-month inflation expectations declined from 5.3% last month to 4.9% in November, their lowest level since March 2020.

On a six-month moving average basis, purchasing plans for homes stalled in November, while purchasing plans for autos rose slightly.