Gold Higher After Drop in US Consumer Sentiment

Gold prices have popped into positive territory following a surprise drop in preliminary sentiment data.

Friday the University of Michigan said its preliminary consumer sentiment survey fell to its lowest point in more than a year, hitting a reading of 89, down from the previous reading of 91.2. The drop was well below consensus expectations, which were forecasting a reading around 92.

Gold was in solidly negative territory ahead of the report and briefly dropped below key support at $1,250 an ounce in initial reaction to positive September retail sales data. However, prices have rebounded with December Comex gold last trading at $1,259.50 an ounce, up 0.14% on the day.

“It is likely that the uncertainty surrounding the presidential election had a negative impact, especially among lower income consumers,” survey director Richard Curtin wrote in a release. “Without that added uncertainty, the confidence measures may not have weakened.”

via Kitco

Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza