Confidence Cracks While the Data Week Heats Up

Consumer confidence has taken its biggest hit since the pandemic. The Westpac–Melbourne Institute Consumer Sentiment Index crashed 12.5% in April, dropping to 80.1 from 91.6 a month earlier. The culprits are familiar but intensifying: petrol at $2.40 a litre, a fresh 25 basis point rate hike still working through household budgets, and the lingering economic fallout from the Iran conflict tightening supply chains at the worst possible time.

The detail underneath the headline is arguably worse. The “family finances versus a year ago” sub-index plunged 16.7% to 66.8, a level that sits uncomfortably close to the depths of the 2022–24 cost-of-living crisis. Job loss fears have jumped to a five-and-a-half year high, and consumers are markedly less bullish on the housing outlook. As Westpac’s Matthew Hassan put it, consumers are bracing for “a return to the extended period of weakness seen during the 2022–24 inflation fight.”

Business sentiment tells a similar story. NAB’s Q1 Business Survey showed confidence falling to minus 4 index points, the lowest since December 2024, with weakness broad-based across every industry except mining. Conditions are holding up better at plus 7, which points to an economy still generating activity even as the mood sours. That gap between how businesses feel and how they are actually performing is worth watching – it tends to close, and the question is which side moves.

Offshore, the data calendar is loaded. The US Producer Price Index for March drops tonight (8:30 am ET, or late tonight AEST). February’s reading came in hot at 0.7% month-on-month, the biggest jump in seven months, with goods prices surging 1.1%. Annual producer inflation hit 3.4%, the highest in a year. If March prints anywhere near that level again, it reinforces the sticky-inflation narrative that has kept the Federal Reserve from cutting and kept the US dollar under pressure through the wrong channels — cost-push rather than demand-pull.

The bigger-picture framing arrives today as well. The IMF releases the main chapter of its April World Economic Outlook, upgrading its 2026 global growth forecast to 3.3%. But the caveats deserve more attention than the headline. The Fund flags rising defence spending, persistent conflict-driven output losses, and an increasingly uneven distribution of growth across advanced and emerging economies. The upgrade reflects genuine resilience in parts, particularly the US and India, but the IMF is clear that inflation trajectories, geopolitical risk, and fiscal pressure from defence commitments remain live threats to the outlook.

For precious metals investors, the picture is constructive. Gold is trading around AUD $6,742 this morning, consolidating above its 50-day moving average after March’s surge. Silver sits near AUD $107, holding its technical structure. The combination of collapsing domestic confidence, hot US producer prices, and an IMF outlook that acknowledges the world is growing through conflict rather than beyond it creates exactly the kind of environment where the hedge bid tends to firm rather than fade.

The ASX 200 continues to trade around its 50-day moving average near 8,853, with direction still undecided. When equity markets stall and confidence data deteriorate, capital tends to rotate toward assets that do not depend on earnings growth for their value proposition. Bullion fits that description.

A lot of numbers land this week. Not all of them will agree with each other. But the weight of the evidence – from Australian kitchen tables to IMF boardrooms – points in the same direction: uncertainty is not receding, and the assets that price uncertainty are not done working.

Here are the weekly charts

XAUUSD 50 Day Moving Average

Gold is trading around US $4,776, sitting just below its 50-day moving average near US $4,900. The metal pulled back sharply from its March highs above $5,400 and has spent the past fortnight consolidating in the $4,700–$4,800 range. Price is pressing up against the moving average from below – a level that will act as near-term resistance. A clean break above it would signal the correction has run its course; continued rejection keeps the consolidation range intact.

XAGUSD 50 Day Moving Average

Silver is trading near US $75.80, well below its 50-day moving average around US $88. The gap between price and the moving average is wider than gold’s, reflecting silver’s sharper sell-off through late March and early April. That said, the metal is showing signs of basing at current levels. Silver tends to lag gold on the way down and lead on the way back up – if gold reclaims its 50-day average, silver typically follows with amplified momentum.

S&P 500 50 Day Moving Average

The S&P 500 has been trading below both its 50-day and 200-day moving averages since late March, when a “death cross” formed – the 50-day crossing below the 200-day near 6,644. This is a widely watched bearish signal and reflects the cumulative drag from geopolitical risk, sticky inflation, and fading confidence in the AI-driven rally that carried tech stocks through 2025. Until the index reclaims at least the 50-day, the path of least resistance for equities remains lower, which historically supports flows into safe-haven assets.

ASX200 50 Day Moving Average

The ASX 200 closed near 8,926 yesterday, sitting just above its 50-day moving average around 8,853. The Australian index continues to outperform the US benchmark on a relative basis, supported by its heavier weighting toward banks and resources. Futures point to a stronger open today, but conviction will depend on how the market digests the Westpac sentiment collapse and tonight’s US PPI print. The 50-day average remains the line in the sand – holding above it keeps the local recovery narrative alive.