Gold price in neutral territory as US consumers see 4.9% inflation in one year


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(Kitco News) – The gold market isn’t finding much traction even as U.S. consumers expect inflationary pressures to remain elevated through 2022, according to the latest consumer sentiment survey from the United States. University of Michigan.

Preliminary survey results show consumer sentiment fell to 68.8 from 70.0 in December. However, according to some market analysts, it is the survey’s inflation expectations that are getting the most attention.

The report said one-year inflation expectations rose to 4.9% from 4.8% in December. At the same time, inflation expectations over 5 to 10 years rose from 2.9% to 3.1%.

Inflation data has attracted a lot of attention lately. Earlier this week, the consumer price index posted an annual increase of 7.0%

However, the latest data is not having much of an impact on gold as prices are trading in neutral territory. Spot gold last traded at $1,823.20 an ounce, up 0.05% on the day.

Andrew Hunter, senior US economist at Capital Economics, said rising inflationary pressure could lead to weaker economic activity throughout the year.

“Along with pressure on purchasing power from soaring prices not likely to end any time soon, all of this suggests that the sharp slowdown in real consumption growth signaled by December’s retail sales data could be a sign of things to come in 2022,” Hunter said. “The additional bad news is that consumers’ long-term inflation expectations hit a nearly 11-year high of 3.1% in January. This provides another reason to suspect that the Fed’s hawkish turn will not be derailed by weaker economic growth.

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