Gold Prices Ignore Strong Rise in Consumer Confidence
(Kitco News)- The gold market is holding on to modest gains despiteconsumer confidence holding near historic highs.
Tuesday, the U.S. Conference Board, said that is ConsumerConfidence Index increased to a reading of 125.4, up from December’s reading of122.1 and beating expectations. According to consensus forecasts, economistswere expecting a reading around 123.2.
Looking at some of the components of the report, theConference Board said that the Present Situation Index dropped slightly to areading of 155.3, down from December's reading of 156.5; at the same time theExpectations Index increased to 105.5 up from the previous reading of 100.8.
“Overall, consumers remainquite confident that the solid pace of growth seen in late 2017 will continueinto 2018,” said Lynn Franco, Director of EconomicIndicators at The Conference Board.
The gold market has notreacted much to U.S. economic data as it focuses on moves in the U.S. dollar,which is losing some ground early in the session. February gold futures lasttraded at $1,344.40 an ounce, up 0.31% on the day.
Looking at the labor market, the report said that consumerswere reasonably optimistic that it will continue to grow.
The survey showed that the proportion of participants whoare expecting more jobs in the months ahead was virtually unchanged at 19.0%,while those anticipating fewer jobs declined from 15.9% to 11.8%.
Economists pay close attention to consumer confidence asthis is seen as a leading indicator of further consumption. Consumers are morelikely to spend more and buy big ticket items when they are optimistic on the U.S.economy.
Monday showed that U.S. personal spending hit a 6-year highas the savings rate fell to a 12-year low.
Andrew Hunter, U.S. economist at Capital Economics, saidthat they expect to see further growth in personal consumption through 2018.
“Overall, the Conference Board indexremains consistent with real consumption growth accelerating even further fromthe rapid 3.8% annualised rate seen in the fourth quarter,” he said. “Thatlooks unlikely, but continued strong jobs growth and the boost to incomes fromthe tax cuts set to be implemented in the coming weeks should ensure thatconsumption continues to expand at a healthy pace over the first half of thisyear.”
By Neils ChristensenFor Kitco News
Follow neils_C
nchristensen@kitco.comwww.kitco.com Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.