Interest rates on pause, but for how long?

In a surprising move, the Reserve Bank of Australia (RBA) opted to pause interest rates, keeping them steady at 4.10%. This decision has raised eyebrows, particularly among conservative voices who argue that inflation is running too high, currently standing at an annual average of 7.0% and a monthly adjusted rate of 5.6%.

The RBA, driven by its mission to contribute to currency stability, full employment, and the economic prosperity of the Australian people, now faces intense scrutiny regarding its commentary, timing, and decision-making over the past year. The impact of this decision has left countless mortgage holders in a state of uncertainty, grappling with the double-edged sword of rising living costs and higher mortgage repayments, or stagnant wage growth.

On the other side of the globe, the US Federal Reserve (FED) continues to address its inflation challenge. With a monthly adjusted average inflation rate of 4.03%, well below Australia’s level, the Fed has pursued a more assertive and consistent path of interest rate hikes, currently standing at 5.25%. As the US inflation rate now falls below its interest rate, it appears that the country is making progress towards resolving the issue.

In the midst of these developments, gold and silver continued their rebounds this week, as depicted in today’s charts. For further context, we have included charts illustrating the performance of gold and silver.

Gold daily, with 200MDA

Silver daily, with 200MDA