(Kitco News) - The gold market is setting new highs after the latest data showed consumer sentiment in the U.S. improving, while one-year inflation expectations remained near their highest level since last year’s tariff shock.
The University of Michigan announced on Friday that the final reading of its Consumer Sentiment survey for April was 49.8. The data was better than expectations, as the consensus forecast of economists called for a hold at the preliminary reading of 47.6, but it was well below March’s final reading of 53.3.
“Consumer sentiment ticked down 3.5 index points this month, now comparable to the trough seen in June 2022,” said Surveys of Consumers Director Joanne Hsu. “Decreases in sentiment were seen across political party, income, age, and education. Expected business conditions declined for both short and long time horizons, nearly matching year-ago readings when the reciprocal tariff regime was implemented.”
“After the two-week cease-fire was announced and gas prices softened a touch, sentiment recovered a modest portion of its early-month losses,” Hsu noted. “The Iran conflict appears to influence consumer views primarily through shocks to gasoline and potentially other prices. In contrast, military and diplomatic developments that do not lift supply constraints or lower energy prices are unlikely to buoy consumers.”
Gold prices shot to fresh session highs in the wake of the 10 am EST data release, with spot gold last trading at $4,725.21 per ounce for a gain of 0.69% on the day.
The April index reflected a dramatic rise in year-ahead inflation expectations, which rose at their fastest pace since the ‘Liberation Day’ tariff announcement of a year ago, while longer-run inflation also ticked higher.
“Year-ahead inflation expectations surged from 3.8% in March to 4.7% this month, the largest one-month increase since April 2025,” Hsu wrote. “The current reading exceeds those seen in 2024 and remains well above the 2.3-3.0% range seen in the two years pre-pandemic. After hovering between 3.2 and 3.3% for the previous four months, long-run inflation expectations climbed to 3.5% in April, the highest reading since October 2025. In 2024, values ranged between 2.8% and 3.2%, while in 2019 and 2020, they were consistently below 2.8%.”
