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(Kitco News) – The gold market continues to struggle to attract buy interest as it holds critical support above $ 1,700 following weaker than expected consumer optimism.
On Tuesday, the United States Conference Board said its consumer confidence index fell to 86.6, compared with an April revised reading of 85.7 and missing expectations. According to consensus forecasts, economists expected a reading around 87.1.
The latest reading of consumer sentiment came a month after the index saw its biggest drop in history.
The gold market sees little reaction to weaker than expected economic data. June gold futures were last traded at $ 1,716 an ounce, down more than 1% on the day.
The report’s disappointing headline figures are the result of a drop in the current situation index, which fell to 71.1 from 73 in April, the report said. Meanwhile, the expectations index increases to 96.9 from 94.3 previously.
“The serious and widespread impact of COVID-19 is mainly reflected in the current situation index, which has dropped by almost 100 points since the start of the pandemic,” said Lynn Franco, Senior Director of Economic Indicators at the Conference Board. “Short-term expectations have risen moderately as the gradual reopening of the economy has helped improve consumer sentiment. “
Franco also noted that although optimism for the future is recovering, there are still many concerns among American consumers.
“Consumers remain concerned about their financial prospects. In addition, inflation expectations continue to rise, which could lead to a reduction in purchasing power and a reduction in spending, “said Franco. “While the decline in confidence seems to have stopped for the moment, the uneven path to recovery and the second potential wave should keep a cloud of uncertainty over consumers. “
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