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Gold prices are struggling to push into positive territory as pessimism grows among U.S. consumers, further raising fears of a potential recession.
American consumer confidence index fell to 95.7 down from June's reading of 98.7, the U.S. Conference Board reported Tuesday. Economists were expecting to see the index at 97.3.
According to economists the sharp drop in consumer sentiment could have a major impact on consumption and weigh on the economy heading into year end.
The gold market is seeing some renewed momentum following the data. August gold futures last traded at $1,716.60 an ounce, down 0.16% on the day.
The report said that the drop in consumer optimism was due to a decline in the Present Situation Index, which fell to 141.3, down from June’s reading of 147.2. At the same time the Expectations Index dropped to 65.3, down from June’s reading of 65.8.
Lynn Franco, senior director of economic indicators at The Conference Board, pointed out that the Expectations Index suggests recession risks continue to grow.
“Concerns about inflation—rising gas and food prices, in particular—continued to weigh on consumers,” said Franco. “As the Fed raises interest rates to rein in inflation, purchasing intentions for cars, homes, and major appliances all pulled back further in July. Looking ahead, inflation and additional rate hikes are likely to continue posing strong headwinds for consumer spending and economic growth over the next six months.”
By Neils Christensen
For Kitco News
