The Conference Board says consumer confidence has fallen to its lowest level since 2014. Gold rose after the release, as the survey exposed growing concern about both the economy and price pressures.
A sharp fall in US consumer confidence accompanied gold’s intraday recovery on September 29. The Conference Board’s index dropped to 81.9 in September from a revised 88.6 in August. In its announcement on X, the organization said this was the lowest reading since 2014.
Gold moved to a session high after the data were released at 10 a.m. Eastern time. Kitco’s market report, updated at 14:30 UTC, put spot gold at $4,170.90 per troy ounce, up 1.36% on the day. That is a post-release snapshot, rather than a live quote or closing price. The full daily gain cannot be attributed to this one announcement.
Jobs and income expectations also weaken
The September report shows that the deterioration extended beyond the headline index. The measure of consumers’ assessment of current business and labor-market conditions fell 7.9 points to 109.3. The index tracking short-term expectations for income, business conditions and jobs declined for a third consecutive month, reaching 63.6.
“The Consumer Confidence Index deteriorated notably in September.”
Responses on the labor market also point to greater caution. The share describing jobs as plentiful was 23.6%, while 21.9% said jobs were hard to get, leaving a gap of just 1.7 percentage points. Consumers became less comfortable about employment, and their income expectations weakened too. Even so, the share anticipating higher income remained above the share expecting a decline.
The Conference Board’s September 29 consumer confidence announcement
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Weaker confidence does not mean lower inflation
Price expectations are the other important part of the report for gold. Average household inflation expectations for the next 12 months rose 0.3 percentage points to 6.1%. The median increased by the same amount to 5.1%. Greater concern about growth was not accompanied by greater confidence that price pressures would ease.
6.1% is not an inflation reading. It is the respondents’ estimate for the coming 12 months. It should not be confused with actual price growth or a target announced by the Federal Reserve.
A weaker economic outlook can bring a lower-rate scenario into focus, potentially supporting gold, which does not pay interest. Rising inflation expectations, however, complicate the case for easier monetary policy. Indeed, 68.4% of respondents expected interest rates to rise over the next 12 months. That figure measures consumer opinion, not a market-implied probability of a Fed decision. Gold’s position relative to interest-bearing assets also depends on the inflation-adjusted real interest rate, rather than just the nominal rate.
The preliminary survey results cover responses collected between September 1 and 23, so they do not capture every development in the final days of the month. Our economic calendar guide explains how to distinguish the reporting period, revisions and release time. Whether gold’s initial reaction holds will depend in part on what subsequent inflation and employment data do to rate expectations.
In the video published today by The Conference Board, Eric Lundh and Allen Li discuss the decline in consumer confidence and households’ growing caution about spending.
Further developments in gold and other precious metals appear in our commodities news coverage.
