Gold sharply higher as final Consumer Sentiment falls to 58.2 in August, inflation expectations rise

The University of Michigan announced on Friday that the final reading of its Consumer Sentiment survey for August was 58.2, which was below the preliminary reading of 58.6 and also lower than July’s final reading of 61.7.

“Consumer sentiment confirmed its early-month reading, moving down about 6% from July,” said Surveys of Consumers Director Joanne Hsu. “Sentiment now stands about 11% above readings from April and May but remains at least 10% below 6 and 12 months ago.”

The components of the August index showed declines in most areas, with one-year and longer-run inflation expectations rising and consumer spending reflecting the impact of high prices.

“This month’s decrease was visible across groups by age, income, and stock wealth,” Hsu wrote. “Moreover, perceptions of many aspects of the economy slipped. Buying conditions for durable goods subsided to their lowest reading in a year, and current personal finances declined 7%, both due to heightened concerns about high prices. Expectations for business conditions and labor markets contracted in August as well. That said, expectations for personal finances held steady this month, albeit at relatively subdued levels relative to a year ago.

The inflation outlook also worsened. “Year-ahead inflation expectations moved up from 4.5% last month to 4.8% this month,” the report noted. “This rise was seen across multiple demographic groups. Independents and Republicans both exhibited month-over-month increases; expectations for Democrats were unchanged from July. Long-run inflation expectations edged up from 3.4% in July to 3.5% in August.”

“This month ended two consecutive months of receding inflation for short-run expectations and three straight months for long-run expectations,” Hsu added. “Still, both readings remain well below the highs seen briefly in April and May 2025.”