U.S. consumer confidence exceeds expectations and boosts the market: Gold prices reversed losses and rose on Friday, holding above the $4,000 mark

Odaily App noted that following the latest U.S. economic data showing improved consumer confidence and easing short-term inflation expectations, gold futures reversed losses and closed higher on Friday.

The preliminary reading of the University of Michigan's July monthly consumer confidence survey was 54.4, better than expected and higher than the final reading of 49.5 in June and 44.8 in May.

This month's one-year inflation expectations edged down from 4.6% to 4.2%, although this figure is still higher than the 3.4% seen in February before the escalation of the U.S.-Iran conflict.

Since the outbreak of war in late February, gold prices have fallen about 25%, under heavy pressure, as the market anticipated prolonged high interest rates driven by war-induced inflation.

Although weaker-than-expected U.S. inflation data released this week eased bets on Fed tightening, escalating hostilities between the U.S. and Iran have sparked investor concern that higher energy prices might sustain high inflation and prompt further Fed rate hikes.

Mitsubishi UFJ Financial Group (MUFG) analyst Soojin Kim stated in a report: "Recent price trends indicate that compared to gold’s traditional safe-haven demand, the market is currently giving greater weight to the prospect of 'U.S. interest rates remaining high for a longer period.' This makes gold appear more vulnerable, unless geopolitical risks translate into broader deterioration in financial market sentiment."

On the New York Mercantile Exchange, the front-month gold futures for July delivery rose 0.7% to $4,012.70 per ounce; the front-month silver futures for July delivery edged up 0.2% to $56.038 per ounce. For the week, gold and silver were down 2.2% and 6.3%, respectively.