Gold Drops on Solid Consumer Confidence Beat
Consumer Confidence Talking Points:
- Gold dropped as the report crossed the wires along with a turn higher from the US Dollar
- Anti-risk assets moved lower, however Coronavirus fears are likely to remain forefront until containment efforts make headway
- The report shines a positive light on the state of the consumer and the index’s employment outlook points to further gains in the labor market
The Conference Board’s Consumer Confidence Index crossed the wires at 131.6 this morning, beating expectations of 128.0 and rising from last month’s 128.2 print. Safe-haven assets reflected the upbeat news to the markets with gold coming under pressure post-release. XAUUSD is now trading under 1573.50 after the precious metal strengthened over the past week on Coronavirus fears. While the upbeat consumer confidence figure may bolster markets, for now, concerns surrounding the coronavirus are likely to continue to weigh until containment efforts appear capable across the globe.
Gold-XAUUSD (1-Min Chart)
Notable from the report’s release was the present situation index, which improved to 175.3 from 170.5, reflecting improved consumer optimism of the current situation for consumers. Also advancing was the expectations index, which jumped from 100.0 to 102.5 as survey participants noted an improved outlook on business and labor conditions for the future. The percentage of consumers expecting business conditions to improve in the next six months is almost unchanged at 18.8 percent, but those expecting those conditions to worsen dropped from 8.8 percent to 8.4 percent.
Going on, the outlook seems to have improved the most regarding the labor market. Consumers expecting more jobs in the months ahead increased to 17.2 from 15.5 percent. The US labor market has seen resilient strength in recent years and that strength will likely continue, should consumers optimistic outlooks pan out.
--Written by Thomas Westwater, Intern Analyst for DailyFX.com
Contact and follow Thomas on Twitter @FxWestwater
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.