Gold prices continued their upward trajectory, hitting new record highs as weakening consumer sentiment provided fresh support for the precious metal.
On Tuesday, the U.S. Conference Board reported a significant drop in its Consumer Confidence Index, which fell to 98.7 in September, down from a revised reading of 105.6 in August. The decline far exceeded economists’ expectations, who had forecasted a relatively stable figure of 103.9.
In response to the disappointing data, gold saw a modest uptick. December gold futures last traded at $2,661.50 per ounce, marking a 0.34% increase on the day.
The drop in consumer confidence was broad-based, with a sharp decline in near-term optimism. The Present Situation Index, which reflects consumers’ perceptions of current business and labor market conditions, plunged by 10.3 points to 124.3. The Expectations Index, which measures short-term outlooks for income, business, and employment, fell by 4.6 points to 81.7—although it remained slightly above the crucial 80 level.
“Consumer confidence in September dropped to near the lower end of the narrow range seen over the last two years. The decline was the sharpest since August 2021, with all five components of the Index weakening,” said Dana M. Peterson, Chief Economist at The Conference Board. “Consumers’ views on current business conditions turned negative, and their assessment of the labor market also deteriorated. There was increased pessimism about future labor market conditions, business prospects, and income.”
Peterson also noted that the decline in confidence was most pronounced among consumers aged 35 to 54, making this age group the least confident over the past six months. In contrast, younger consumers under the age of 35 remained the most optimistic.
As consumer optimism wanes, investors appear to be flocking to safe-haven assets like gold, sustaining its bullish momentum.
You Might Be Interested In
- When to Buy Gold in 2024: A Comprehensive Guide
- Gold Prices Soar to Record Highs Amid Optimism for U.S. Rate Cuts; Copper Surges on Chinese Stimulus
- Gold Prices Retreat from Record Highs Amid Rising Treasury Yields and Profit-Taking