U.S. consumer confidence has fallen into the doldrums heading into the crucial holiday season, giving the gold bulls a solid grounding to make further price gains.
The latest U.S. Conference Board reading showed confidence levels declining from 102.5 to 100.2 in November. The Present Situation Index was also down, from 138.9m to 137.4m while the Expectations Index also lost ground, falling from 78.1m in October to a reading of 75.4m in November.
Combined, this trio of losses reflects a growing sense of unease and overall downcast mood, just as spending should be ramping up for Christmas – and sees gold poised to take the driving seat with solid and sustained price gains. An expectation that high inflation will continue to pile pressure on household budgets, rising gas prices and high food costs all contributed to the overall downcast mood, with consumers also bracing for the impact of recession, explained The Conference Board’s Senior Director of Economic Indexes.
Lynn Franco said, “Consumer confidence declined again in November, most likely prompted by the recent rise in gas prices. The Present Situation Index moderated further and continues to suggest the economy has lost momentum as the year winds down. Consumers’ expectations regarding the short to medium-term outlook remained gloomy. Indeed, the Expectations Index is below a reading of 80, which suggests the likelihood of a recession remains elevated.”
Franco added that this pessimistic outlook will carry through into 2023, which means that gold prices could gain further over the course of the next few monthly readings. “Inflation expectations increased to their highest level since July, with both gas and food prices as the main culprits. Intentions to purchase homes, automobiles, and big-ticket appliances all cooled,” Franco explained. “The combination of inflation and interest rate hikes will continue to pose challenges to confidence and economic growth through 2023.”
Gold traded around £1,460 ($1,765) in reaction to this reading. Don’t wait until prices creep higher. Buy now.
