Spot Gold Approaches $4,400/oz as US Consumer Sentiment Drops to 51 and Inflation Expectations Rise

Latest University of Michigan data showed the preliminary US consumer sentiment index for August falling to 51, below forecasts of 54.5 and July's 55.2. This prompted gold prices to approach daily highs. Surveys Director Joanne Hsu stated sentiment dropped about 8%, with business condition expectations sinking 11% short-term and 17% long-term.

The decline spanned political groups, hitting Republicans hardest at 19% below pre-Iran conflict levels and the lowest since the 2024 election. Older, lower-income, and non-college-educated consumers were especially affected by inflation fears, with just 8% expecting income growth to outpace prices versus 18% in December 2024.

Year-ahead inflation expectations rose to 4.3% from 4.2%, while long-run stayed at 3.3%. Spot gold traded at $4,389.03 per ounce, up 0.87% and attempting to reclaim $4,400.