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The Reserve Bank of Australia (RBA) says inflation data suggests some signs of a broad rebound. Its uncertain how much of a signal should be taken from recent inflation data. Some of the rebound in inflation may be sustainable.December 9th - The Reserve Bank of Australia (RBA) failed to deliver an early Christmas "gift" to mortgage holders, keeping interest rates unchanged at its final meeting of the year. In Tuesdays widely anticipated, unanimous decision, the Monetary Policy Committee maintained the cash rate at 3.6%. Rising inflation in the second half of 2025 dashed market hopes for further rate cuts, after the RBA had already cut rates by a total of 75 basis points since February. The interest rate market and most economists now believe that the RBAs easing cycle has ended. Some analysts pointed out that if inflationary pressures continue to rise, the central bank may be forced to raise rates as early as February next year. Domains chief economist, Nicola Powell, said the shift in interest rate expectations could help alleviate the pressure of rapidly rising housing prices over the past year.Reserve Bank of Australia: Global economic uncertainty remains significant, but so far, it has had little impact on overall growth and trade with Australia’s major trading partners.The Reserve Bank of Australia (RBA) believes that some of the recent rise in core inflation is due to temporary factors.The Reserve Bank of Australia: The Committee is focused on achieving its mission of price stability and full employment and will take the measures it deems necessary to achieve this goal.

Forecast for the Gold Price: XAU/USD moves up above $1,850 as yields fall following FOMC minutes

Daniel Rogers

Jan 05, 2023 15:01

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In the late New York session, the gold price (XAU/USD) has attracted buying activity following a corrective move to approach the critical support of $1,850. After failing to sustain above $1,860.00, the precious metal declined; however, the corrective move is light and does not indicate a serious reversal.

 

After a decline in the U.S. Manufacturing PMI bolstered indications of further deceleration in the U.S. Consumer Price Index, market participants' demand for risk-perceived assets such as the S&P 500 increased (CPI). In response to a decrease in product demand, corporations may be compelled to reduce the price of factory items.

 

The US Dollar Index (DXY) fell below the 104.00 level as yields on 10-year US Treasuries were subjected to intense pressure and plummeted to roughly 3.69 percent. Safe-haven assets are under pressure due to the anticipation of a further fall in inflationary pressures. After remaining aggressive throughout the entire year, Federal Reserve (Fed) head Jerome Powell changed to a slowing scenario in December regarding an interest rate hike. Undoubtedly, the inflation rate is still a significant distance from the 2% target; yet, the presence of factors that support a further deceleration in the price index weighs on safe-haven assets.

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