Consumer Confidence Report and Exec Survey Say Recession Lurking

• Key consumer confidence metric signals possible recession.
• Majority of America’s chief financial officers say recession could unfold this year.
• U.S. economic policy now in “complete chaos.”
• Goldman Sachs: “Macro uncertainty” could push gold close to $3,700 this year.

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Despite surpassing the longstanding psychological barrier of $3,000 per ounce two weeks ago, gold continues to forge higher, showing exceptional resilience and telegraphing almost no signs of meaningful profit-taking among traders. A big reason for gold’s continued climb upward is that the economic uncertainty which has fueled metal for the last several years remains very much intact. This week saw more signs of that uncertainty rise to the surface, including a stunningly downbeat consumer confidence report and survey results showing America’s corporate financial leaders believe recession could be right around the corner. As both consumer sentiment and business sentiment sink in real time, experts say the outlook for precious metals continues to grow.

One of the very real problems with dismal economic outlooks on the part of people who are in a position to materially affect the economy is that those viewpoints run the risk of becoming self-fulfilling prophecies.

Declining Sentiment as Self-Fulfilling Prophecy

The financial news and information website Finance Magnates offers this succinct explanation of how that can work:

Consumer sentiment surveys can provide insight into the direction of economic expectations. A quick reduction in consumer confidence, caused by recession fears, can lead to lower consumer expenditure. If this trend continues, the broader economy may suffer.

On the business front, company leaders make critical decisions based on their economic forecast. A negative outlook may cause them to delay capital investments, expansion plans, or hiring. When these decisions are made collectively across industries, they might have a negative impact on economic growth.[1]

This week, we’re going to take a closer look at the declining expectations of both consumers and business professionals through the lens of two brand-new surveys: The Conference Board’s Consumer Confidence for March, as well as the latest CNBC CFO Council quarterly survey for the first quarter of 2025.

Beyond the potential implications for the economy implied by the results of each survey are the implications for perceived safe-haven assets such as gold. Not only might the loss of faith in the economy now being exhibited by Americans at all levels help keep gold above the recently passed $3,000-per-ounce threshold, but analysts — including those at one of the world’s renowned investment banks — say the added dose of uncertainty could spike gold another 20% higher before the year is out.

Consumer Confidence Report Indicates Americans Now Mired in Bleak Outlook

As for the particularly downbeat view of the economy from the perspective of consumers, we were served a big helping of that this week in the form of a sizable drop in the March Consumer Confidence Index issued by The Conference Board, a prestigious economic think tank.

On Tuesday, the board reported that its index … a widely followed leading economic indicator … fell hard this month, dropping 7.2 points from February’s measure of 100.1 to land at 92.9.

Not only is that significant because readings below 100 imply greater pessimism among Americans, but this month’s measure also marks the fourth consecutive decline for the metric.

What makes the drop even more notable is the height at which the index sat as recently as December: 112.8. Many readers likely remember the wave of optimism that swept over much of the country following the November reelection of the decidedly pro-business President Trump.

Since then, however, ongoing economic challenges such as persistent inflation and higher interest rates have been compounded by worries over the impact of the chief executive’s aggressive and sometimes unclear tariff policy. In the span of just a few months, the index has fallen from its relatively lofty heights to its lowest level in slightly more than four years.

If we knew nothing more than that, the results of the survey would be concerning enough. But as it happens, buried underneath the headline metric are component measures … the nuts and bolts of the overall index … that tell more of the story. And it seems one of those, the Expectations Index, may be weaving a potentially worrisome tale.

Key Consumer Sentiment Measure Sends Glaring Recession Signal

As the name suggests, the Expectations Index asks consumers to provide their outlook for business, employment, and income over the next six months. From their answers, a separate index measure is generated, one that tends to grab as much of the spotlight as the headline number.

That certainly was the case this month. In March, the Expectations Index fell 9.6 points, to land at 65.2. It’s the metric’s lowest reading in 12 years and far below the level of 80 which The Conference Board says serves as a threshold measure of recession-signal territory.

In a statement, Stephanie Guichard, a senior economist at The Conference Board, clarified the sentiment conveyed by the collapsing metric:

Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low. Meanwhile, consumers’ optimism about future income—which had held up quite strongly in the past few months—largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations.[2]

A couple of the headline index’s 12-month component measures indicated a particularly bleak assessment of what may lie ahead.

One of those found that just 37.4% of survey respondents think the stock market will be higher a year from now. That represents a whopping 20-percentage-point decline from November 2024, in the wake of Trump’s reelection and the first time the one-year expectation of stock prices turned negative since late 2023.

Americans’ Inflation Expectations Remain Unanchored

More concerning are the inflation expectations of consumers, which clearly remain unanchored. Survey respondents in March said they expect annual inflation to be sitting at 6.2% a year from now, up more than a full percentage point from where that measure sat in December.

That’s even higher than the one-year inflation expectations recorded this month by the nation’s other closely monitored measure of consumer outlook, the University of Michigan’s Survey of Consumers. In that survey, consumers said they expect to see inflation at 4.9% in another year … and while that’s lower than the projection of those surveyed by The Conference Board, it’s worth noting that the expectations of Michigan survey respondents also remain greatly unanchored, rising 0.6 percentage points from February.

As it happens, the dismal economic outlook conveyed by The Conference Board’s survey results is largely shared by a demographic that sits atop the professional food chain – the chief financial officers (CFOs) of the nation’s leading companies. Some might see the expectations of those who occupy the C-suite as even more concerning … not only because of their unique vantage point but also because the majority of these savvy business professionals said they expect the nation to fall into recession before the year is up.

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Majority of America’s Chief Financial Officers Expect Recession Before 2025 Is Over

As a matter of fact, fully 60% of CFOs say they expect to see a recession in 2025, while another 15% believe the U.S. will suffer a recessionary downturn in 2026; this according to the latest CNBC CFO Council quarterly survey for Q1 2025.

Notably, the Q4 2024 survey found that just 7% of CFOs thought the U.S. might see a recession in 2025. What a difference a handful of months makes.

The basis of the dour outlook is what you might expect, based on recent events: The CFOs describe themselves as “pessimistic” on the current state of the economy, and seem to attribute that almost entirely to both President Trump’s aggressive trade policies as well as what they see as the lack of clarity in the application of those policies.[3]

According to the survey, the nation’s trade policy was cited by survey respondents as the number one external business risk — 30% of CFOs said that. Next, 25% said they see inflation as the biggest business risk this year, while another 20% it’s the possibility of declining consumer demand that has them most concerned so far in 2025.

One CFO frustratingly described their opinion of the Trump 2.0 presidency this way:

Too chaotic for business to navigate effectively.[3]

Other words and phrases used by CFOs to describe their opinion of the way Trump is handling his second term so far include:

• “extreme”;

• “disruptive”;

• “aggressive”;

• “a wild ride.”[3]

Tariff Pressure Could Affect Fed Target and Increase Uncertainty

The survey also revealed that 90% of CFOs say that they expect the tariff-riddled trade environment to trigger “resurgent inflation,” while roughly 50% said they’re now not expecting to see inflation get back to the Fed’s 2% target until last 2026 or 2027.[3]

Underscoring the general climate of uncertainty that now characterizes the broader economy is how the business pros answered when asked to name the sector of the stock market they think is poised to perform the best over the next six months.

“Don’t know,” is how a majority of them answered … the first time in the survey’s history that so many respondents answered that way.[3]

Under the circumstances, this answer shouldn’t be a surprise, either: 90% of survey respondents said that Dow Jones Industrial Average will sink to 40,000 before it surpasses 50,000. One of the implications of that outlook is that the Dow would have to lose another 2,500 points to retest 40,000.

Surprisingly High CFO Recession Sentiment Aligns with Consumer Worries

Finally, there’s this: Fully 95% of CFOs reported that current policy is impacting their ability to make business decisions.

Ninety-five percent.

Frankly, this quarter’s survey results are notable not only for the messages they send on where CFOs think the economy and markets may be headed, but also the degree of frustration felt by the financial officers at this time.

“Complete chaos, without an end game strategy,” said one CFO in their assessment of the White House’s management of economic and trade policy right now.[3]

Viewed separately, the results of The Conference Board’s March Consumer Confidence Survey or those of the Q1 2025 CNBC CFO Council quarterly survey might be enough to coax an interested party into thinking that a downturn was lurking. But viewed together, the outlook for the economy in the near term shared by consumers and corporate financial professionals suggests both a comprehensive lack of confidence in its resilience as well as a lack of certainty in its direction.

And that, strategists suggest, could be a winning “formula” for perceived safe-haven assets such as precious metals. And why, despite the leaps and bounds by which gold already has climbed into record territory, many of those same strategists expect it to keep rising from here.

Goldman Sachs Brimming with Gold Optimism Right Now

In truth, it probably would be very difficult these days to find many analysts critical of gold’s near-term prospects. That reality speaks to just how robust gold’s underlying drivers continue to be.

Clearly, one of those underlying drivers right now is uncertainty … the very uncertainty suggested by the highly pessimistic outlooks of both consumers and CFOs right now.

Uncertainty’s ongoing impact on the price of gold continues to hold the attention of strategists at Goldman Sachs. Goldman analysts recently raised their year-end price target on gold from $3,100 to $3,300.

Part of the reason for their continued optimism is the anticipation that central banks, which have the same needs for safe-haven assets as anyone else and are not hamstrung by record-high gold prices as individuals are, will keep buying the metal at a relentless pace.

Citing the record levels of central bank gold demand that have been in place since 2022, Goldman analysts Lina Thomas and Daan Struyven wrote a few days ago:

We view this as a structural shift in reserve management behavior, and we do not expect a near-term reversal.[4]

But they said something else; something that speaks to the degree to which the sudden deterioration in sentiment across the board is expected to impact not only central banks and larger institutions but also individual investors.

Strategists: “Macro Uncertainty” Could Push Gold Near $3,700 by Year End

Noting that inflows into gold-backed ETFs — seen as a proxy for retail investor demand — have “surprised to the upside” recently, Thomas and Struyven suggested the period of rather extreme uncertainty we’re seeing right now could prompt an even bigger wave of interest in gold … with significantly higher prices resulting.[4]

“While ETF flows generally track Fed policy rates,” the analysts wrote, “history shows they can overshoot during extended periods of macro uncertainty — such as during the COVID-19 pandemic.”[4]

And the potential punchline, say the analysts?

If the sharp deterioration in consumer sentiment conveyed by The Conference Board’s latest consumer confidence report and the equally sharp deterioration in CFO economic confidence continues, the demand for hedge assets potentially could reach 2020 levels, say Thomas and Struyven, and possibly send gold as high as $3,680 per ounce by the end of this year.[4]

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