Gold Slumps on Stronger US Consumer Confidence and Easing Inflation Expectations
The gold market plummeted to a new session low after the release of the University of Michigan's Consumer Sentiment survey for July. The final reading came in at 55.2, exceeding economists' expectations and surpassing the preliminary reading of 54.4. This marks an improvement from June's final reading of 49.5.
According to Surveys of Consumers Director Joanne Hsu, 'Consumer sentiment confirmed its early-month reading, landing almost 12% above June.' However, she also noted that consumers remain focused on pocketbook issues like purchasing power, while political or military developments are in the background.
The July index showed a drop in year-ahead inflation expectations, falling from 4.6% in June to a still-elevated 4.2%. Long-run inflation expectations held steady at 3.3%, remaining higher than the 2024 range of 2.8% to 3.2%.
As a result, spot gold fell to a fresh session low of $4,022.13 in the minutes before the data release and last traded at $4,029.51 per ounce for a loss of 1.80% on the day.