Up Ticks In Consumer Expectations Are Bullish For Gold

The small up tick in consumer expectations (CE) in December must be viewed within the context of secular down cycle. This cycle is not scheduled to end until 2016, so ignore the short-term interpretations by the experts. Unexpected up ticks or statistical noise with the secular down trend, often hyped to sell headlines and support spin, represent little more than technical fuel for the next decline.

A study of the CE trend is useful for gold investors. The inverse correlation between CE and gold is strong. Investors can use short-term up ticks in consumer expectations to augment their gold line into weakness.

University of Michigan Consumer Expectations (CE) and Gold: A Correlation Study:


Headline: Consumer sentiment rises in December

A gauge of U.S. consumer sentiment rose in December, reaching the highest level in six months, but remains at a low level on concerns about “stagnant incomes,” according to the Reuters/University of Michigan index released Thursday.

The gauge climbed to 74.5 in late December, matching estimates from economists polled by MarketWatch, but remains below pre-recession levels of more than 80. See economic calendar. The final December result compares with 74.2 earlier in the month, and 71.6 in November.

Source: marketwatch.com