FED interest rate decision primed and ready

20 September, 2023
As at 9am, AEST.

Gold Price AUD $AU2995
Silver Price AUD $AU36.09
Platinum Price AUD $AU1475

It's clear that the financial markets are on edge, awaiting crucial decisions from the US Federal Reserve (FED) that could have far-reaching implications. The FED is poised to announce whether it will raise interest rates to cool the economy or maintain the current rate. The US economy has displayed remarkable resilience despite high interest rates, with the US500 index enjoying substantial gains this year (15%), although August and September have introduced some market weakness.

Given that the US often sets the tone for global economic decisions, Australia is likely to follow suit. If the US tightens its monetary policy further, their dollar could strengthen, which would exacerbate the already low exchange rate of the Australian dollar against the US dollar (currently around 64 cents). This could benefit Australian exports but increase the cost of imports (again increasing the cost of living for Australians).

Gold and Silver have shown some strength in the past week, consolidating their positions and beginning to climb back into existing patterns. As share markets experience some turbulence in the coming days, an elevated oil price (currently at $US94) should help keep Gold and Silver relatively stable.

Tomorrow, after the news from the US Federal Reserve, we can discuss the current interest rate position and its potential impact on consumers as we approach the Christmas season.

Here’s today’s charts.

Gold daily, with 200MDA

Silver daily, with 200MDA