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Gold moved off its post payrolls lows after preliminary data showed that consumer sentiment in the United States improved by more than economists expected. Inflation expectations also declined, although the survey showed that concerns about high prices remained widespread.

The University of Michigan said Friday that the preliminary November reading of its Consumer Sentiment survey reached 51. Economists had expected a reading of 48, matching the final result reported for October.

The stronger reading offered a modest improvement from the previous month, but the details revealed sharp differences among consumers. Gains appeared in expectations for personal finances and business conditions, while political affiliation and household wealth influenced the results.

“Consumer sentiment ticked up about 6% in the preliminary read,” said Surveys of Consumers Director Joanne Hsu in the report.

“Modest improvements in multiple domains, including expected personal finances and business conditions, were concentrated primarily among independents. While sentiment lifted for lower- and middle-wealth consumers, it fell 5% for those with the largest stock portfolios in the wake of a relatively turbulent period in stock markets.”

The decline among consumers with the largest stock portfolios followed what Hsu described as turbulence in equity markets. At the same time, worries about a potential artificial intelligence bubble were becoming more visible among survey participants.

Hsu wrote, “AI worries, however, were dwarfed by cost of living concerns, which continue to be at the forefront of consumers’ minds across the population.”

High prices remained the dominant issue despite the improvement in the headline sentiment reading. A majority of consumers spontaneously reported that inflation had damaged their living standards, and that share climbed notably from February.

“About 57% spontaneously mentioned that their living standards have been eroded by high prices, the highest seen since May and up from 46% in February, just prior to the Iran conflict. Despite this month’s improvement, sentiment is down 10% from February.”

The survey was conducted from October 20 through November 2 and concluded just before the midterm election. Its political findings showed that many respondents expected Democrats to capture control of both chambers.

“In the two months leading into the election, more than two-thirds of consumers expected Democrats to win the House, and over half anticipated the same for the Senate,” Hsu said.

Gold reacted to the report by moving away from its session lows in the minutes after the 10 am ET release. Spot gold last traded at $4,047.71 per ounce, leaving the precious metal down 0.96% for the day.

The preliminary November survey also showed declines in inflation expectations across both the shorter and longer horizons. Expectations for inflation over the coming year fell more sharply, while the longer term measure edged down by a smaller amount.

“Year-ahead inflation expectations declined from 4.7% last month to 4.3% this month,” Hsu noted. The latest figure was the lowest since August but remained well above the February level and every reading recorded during 2024.

“Although the current reading is the lowest since August, it remains substantially above the 3.4% seen in February before the Iran conflict began, along with all 2024 readings.”

Expectations for inflation over the longer run slipped to 3.4% from 3.5% in October. Even after that decline, the measure remained above the entire 2024 range cited in the report.

“Long-run inflation expectations inched down from 3.5% in October to 3.4%, notably higher than their 2024 range of 2.8% to 3.2%.”

The report therefore delivered a mixed picture for markets. Consumer sentiment exceeded expectations and inflation forecasts eased, but sentiment remained below February levels while a large majority of consumers continued to identify the cost of living as a pressing concern.

For gold, the immediate response was a partial recovery from the lows rather than a full reversal of the daily decline. The metal remained near $4,050 per ounce as markets absorbed stronger sentiment alongside still elevated inflation expectations.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.