(Kitco News) - The gold market continues to hold support above $4,500 an ounce but is struggling to attract new bullish momentum, even as U.S. consumer confidence continues to fall amid rising inflation pressures and growing recession risks.
The Consumer Confidence Index dropped to 93.1 in May, compared to April’s reading of 93.8, the Conference Board announced on Tuesday. Although sentiment declined, the data slightly beat economists' expectations. According to consensus estimates, the market had been expecting a drop to 91.9.
"Consumer confidence edged downward in May as the inflationary impacts of the war in the Middle East intensified," said Dana M. Peterson, Chief Economist at The Conference Board. "Consumer appraisals of current business conditions and the current labor market were moderately less positive compared to last month. This was somewhat offset by modest improvements in consumers' expectations for business conditions and the labor market six months from now. Meanwhile, income expectations eased in May, as those anticipating lower income rose."
The gold market is seeing little reaction to the latest economic data. Spot gold last traded at $4,509.10 an ounce, down more than 1% on the day.
The precious metal continues to react to the ongoing chaos in the Middle East, as the war in Iran drives oil prices higher and generates new inflation fears.
