(Kitco News) – Gold prices remain under pressure but holding steady ground near its session high as U.S. consumer sentiment has weakened and inflation expectations remain high, according to the latest report from the University of Michigan.
Friday, the University of Michigan said the preliminary reading of its Consumer Sentiment Index dropped to 61.7, down from January’s reading of 67.2. the data missed expectations as consensus forecasts were calling for a roughly unchanged reading in consumer sentiment.
The gold market is not seeing much reaction to the latest disappointing economic data as it trades in relatively neutral territory. April gold futures last traded at $1,833.80 an ounce, down 0.20% on the day.
Supporting the gold market is growing expectations that high inflation will remain through 2022. The report said that one-year inflation expectations rose to 5%, up from the previous forecast of 4.9%.
Long-term inflation expectations remains anchored at 3.1%, unchanged from January’s level.
However, the report noted that rising consumer prices is the biggest reason why sentiment has dropped.
“The recent declines have been driven by weakening personal financial prospects, largely due to rising inflation, less confidence in the government’s economic policies, and the least favorable long term economic outlook in a decade,” the report said.
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