(Kitco News) - Gold prices are trading up from session lows after the latest data showed a worsening picture for U.S. consumer sentiment this month.The Consumer Confidence Index rose to 90.8 in July, below economists’ consensus forecast for a 92.3 reading and below the upwardly revised 92.2 print from June, the Conference Board announced on Tuesday. The Present Situation Index—based on consumers' assessment of current business and labor market conditions—fell by 3.6 points to 114.9, its third consecutive monthly decline,” the report noted. The Expectations Index—based on consumers' short-term outlook for income, business, and labor market conditions—was unchanged at 74.7. The survey period was July 1–22, encompassing ongoing conflict in the Middle East.Gold prices were coming off session lows in the wake of the 10 am ET data release, with spot gold last trading at $4,029.86 per ounce at the time of writing for a loss of 1.14% on the daily chart.“Consumer confidence moderated slightly in July, continuing a general downward sloping trajectory since late 2021," said Dana Peterson, Chief Economist at The Conference Board. “The Present Situation Index was less positive for a third consecutive month while the Expectations Index remained in negative territory. Consumer appraisals of current business conditions and, to a lesser extent, perceptions of the current labor market both softened. Looking ahead, consumers anticipate little improvement in business conditions over the next six months, but expectations for the labor market were slightly less negative. Expectations for household incomes moderated but remained optimistic overall.”The Present Situation Index declined in July. “Net views of current business conditions—the share saying conditions are "good" versus "bad"—fell by 2.6 ppt to +1.1%, barely holding onto positive territory,” the report stated. “Perceptions of current employment conditions also declined, with the labor market differential—the share of consumers saying jobs are "plentiful" minus the share saying jobs are "hard to get"—dipping by 0.7 ppts to +3.1%. This downshift was driven by fewer consumers reporting that jobs are "plentiful", while those saying jobs are "hard to get" dipped slightly over the month.”Meanwhile, the Expectations Index remained unchanged in July, with two of its three components declined. “Net expectations for business conditions [fell] by 1.5 ppts to –3.3%,”  the report noted. “Net expectations for household income also softened, by a milder 0.5 ppts, to +7.3%. Net expectations for labor market conditions improved by 1.3 ppts but remained in negative territory.”“On a six-month moving average basis, by age, confidence for consumers under 35 remained the highest, while confidence among those aged 35-54 showed the greatest improvement,” they Conference Board said. “By income, confidence was mixed, but generally higher-income groups were more optimistic. By generation, confidence for Gen Z and Millennials remained the highest, while confidence fell the most for the Silent Generation on a six-month moving average basis. By political affiliation, confidence among Independents and Democrats softened while Republicans were somewhat more positive.”Consumers' write-in responses on the economy were mostly pessimistic once again in July. “References to prices and oil and gas eased in frequency but remain elevated,” the report said. “Comments about food and grocery prices increased. Mentions of war, geopolitics, and conflict eased during the sample period. However, as the fighting has reaccelerated quite recently there could be an increase in these mentions in the revised data for July. Notably, references to jobs and unemployment picked up slightly.”Turning to price pressures, consumers' average and median 12-month inflation expectations were less elevated in July compared to the previous month. “Most consumers—61.3%, unchanged from June—still expected higher interest rates over the next 12 months,” they noted. “Notwithstanding recent volatility in the equity markets, consumers still expected higher stock prices a year from now.”

(Kitco News) - Gold prices are expected to consolidate around $4,000 an ounce through the rest of the summer as markets wait for clearer guidance from the Federal Reserve on the direction of its monetary policy for the remainder of the year.However, one market strategist said that, looking beyond the current consolidation phase, gold’s next $1,000 move will likely be higher.In an interview with Kitco News, Aakash Doshi, Head of Gold Strategy at State Street Asset Management, said that market expectations surrounding the Federal Reserve’s tightening bias appear to be overly aggressive.“The markets have done a lot of the Federal Reserve’s work already,” he said. “There is a strong case to be made that the Federal Reserve can stay on hold through the rest of the year as real rates have moved higher.”Doshi’s comments come as gold has been unable to hold any sustained gains above $4,100 an ounce, with long-term real yields trading near historic highs. Ten-year real yields are trading around 2.4%, near their highest level since October 2023.Despite these headwinds, Doshi said gold continues to find solid support around $4,000 an ounce, as monetary policy expectations appear to have reached peak hawkishness ahead of the central bank’s monetary policy decision next week.However, he added that gold will continue to consolidate until markets have a clearer path for U.S. monetary policy. In the interview, he reiterated his updated base-case forecast for gold prices to trade between $4,750 and $5,500 an ounce over the next six to nine months. At the same time, he said gold could still push to $5,000 an ounce within the first half of next year.“If there is a shift in rate expectations, which pushes 2-year yields below 4%, gold prices could get to $4,500 to $4,750 an ounce before the end of the year,” he said. “That puts $5,000 back into play.”As for what could push interest rates lower, Doshi said July’s nonfarm payrolls report next week could be the key catalyst for gold’s next move. He explained that June’s employment report showed that only 57,000 jobs were created last month, significantly missing expectations.“If that data disappoints, then you could see markets reprice year-end rate hike expectations really quickly,” he said.Although higher interest rate expectations have cooled investment demand, Doshi noted that other pillars of the gold market remain strong. He said central bank demand remains resilient. At the same time, Chinese demand remains relatively healthy, with imports hitting a two-year high in June. He added that in this environment, investment demand for gold-backed exchange-traded funds would only need to remain at current levels to have a meaningful impact on prices.Doshi also said that despite rising interest rates and higher opportunity costs, gold remains an important global monetary asset as the ongoing war with Iran drives global debt and deficit spending higher.In a note published earlier this month, Doshi said that global debt has climbed to a record $353 trillion, with government borrowing accounting for an unprecedented share of that total. At the same time, foreign ownership of U.S. Treasuries has steadily declined while central banks continue to increase their gold reserves, reinforcing the precious metal's role as a strategic monetary asset.He added that even if the Federal Reserve maintains a hawkish stance, those longer-term trends should continue to support gold as investors look for diversification away from traditional reserve assets.“An active fiscal and inflation impulse should continue to support demand for gold as a monetary hedge,” he said in the note.