Gold Reaches Session High as Consumer Confidence Drops to 81.9

Spot Gold Reaches $4,170.90 Per Ounce as Consumer Confidence Slumps to 81.9

Spot gold climbed to a session high of $4,170.90 per ounce, gaining 1.36% on the daily chart during Tuesday’s trading session. The precious metal advanced following the release of data from The Conference Board showing the Consumer Confidence Index fell to 81.9 in September, missing economists’ consensus forecasts of 89.2 and dropping below August’s downwardly revised reading of 88.6.

The Bottom Line

• Index Decline: The Consumer Confidence Index fell to 81.9 in September, driven by drops in both the Present Situation and Expectations indexes.
• Inflation Pressures: Average and median 12-month inflation expectations climbed to 6.1% and 5.1%, respectively, while anticipated interest rate hikes jumped 5.2 percentage points to 68.4%.
• Market Reaction: Spot gold surged to $4,170.90 per ounce, reflecting a 1.36% daily gain.

Deteriorating Sentiment Across Present and Future Metrics

The Conference Board’s September survey, conducted between September 1 and 23, captured a broad deterioration in consumer sentiment amid ongoing geopolitical tensions and the Fed rate hike. The Present Situation Index dropped 7.9 points to 109.3. Within that sub-index, net views of current business conditions declined 3.4 percentage points to –1.9%. Perceptions of the current labor market also softened. The labor market differential—calculated as the percentage of consumers viewing jobs as “plentiful” minus those finding jobs “hard to get”—retreated by 2.5 percentage points to +1.7%. Meanwhile, the Expectations Index fell 5.9 points to 63.6, marking its third consecutive monthly decline. All three of its underlying components deteriorated: net expectations for business conditions dropped 3.2 percentage points to –9.5%, labor market expectations declined 3.1 percentage points to –14.4%, and household income expectations slipped 3.0 percentage points to +2.5%.

Demographic Shifts and Rising Inflation Expectations

On a six-month moving average basis, confidence trended downward across all age groups and nearly all income brackets. While higher-income households remained generally more optimistic, consumers with household incomes between $125,000 and $149,000 recorded the greatest decline in confidence over the last six months. Generation Z and Millennials maintained the highest confidence levels by generation, while sentiment among Generation X, Baby Boomers, and the Silent Generation continued to weaken. Confidence also declined across all political affiliations, encompassing Democrats, Republicans, and Independents.

Dana Peterson, Chief Economist at The Conference Board, noted that consumer write-in responses pointed heavily to persistent price pressures. “References to prices, the high cost of goods and services, and oil and gas prices in particular, rose to new heights, reflecting September’s surge in fuel costs,” Peterson stated. Consequently, consumers’ average and median 12-month inflation expectations increased by 0.3 percentage points to 6.1% and 5.1%, respectively. Furthermore, the share of consumers anticipating higher interest rates over the coming year increased by 5.2 percentage points to 68.4%.

Macroeconomic Context and Precious Metals Performance

Index / Metric	September Reading	Prior Reading / Change
Consumer Confidence Index	81.9	88.6 (August, revised)
Present Situation Index	109.3	Down 7.9 points
Expectations Index	63.6	Down 5.9 points
Spot Gold Price	$4,170.90 / oz	Up 1.36% daily gain

Jeffrey Roach, Chief Economist at LPL Financial, observed that household sentiment reflects underlying strains from stubborn inflation and the Iran conflict. “Americans feel jobs are more scarce and are pulling back on plans for homes, cars, and big-ticket purchases, emitting a warning sign for holiday spending even though layoffs data show employers aren’t yet cutting workers to match the gloom,” Roach explained. He added that while the survey captures growing pessimism, it remains a survey rather than hard economic data, meaning immediate shifts in Federal Reserve policy expectations are unlikely unless subsequent hard data confirms the trend.

Photo: gold-eagle.com

Spot gold extended its intraday momentum to touch $4,170.90 per ounce.

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.