Interest rate hikes (again) as Gold continues to soar
Gold continues its reign this week, consolidating around $USD2000 per ounce. We’ve included both the ASX200 and US500 charts for you today, clearly showing the continued fall in both sharemarkets, both now selling below their 200MDA with room to move lower in the coming weeks.
And in Australia, we’ve just received more poor inflation data for the month of September. September reporting a 1.2% increase in CPI, bringing the annualised figure for CPI to 5.4%, well above the range of 2-3% we’re aiming for. And on the back of similar poor data from the US, the likelihood of an increase in interest rates is looking very high. This news will shock (and dismay) the millions of Aussies already struggling with mortgage repayments that are now looking towards a bleak Christmas.
With RBA’s new Governor Michelle Bullock now in the position to shape the Australian economy through rate policy, many economists are predicting a continued hawkish stance in response to stubborn inflation.
A quick bit of maths for some perspective. With mortgage (P+I) repayment capability now sitting around 10%, a $750,000 home loan requires a clear $75K to service this loan from the lenders point of view. That’s right, before insurance, house maintenance and other housing costs you’ll need to have a spare $1500 a week after tax to simply service the loan on the house. With this kind of pressure sitting squarely on middle income earners with young families, the ability for our economy to recover quickly seems completely far-fetched.
So it is no surprise that Gold is now outperforming the ASX for the year. Keep an eye on Silver in the coming week, as it tries to catchup.
Enjoy today’s charts and forecast.
Gold daily chart, with 200MDA
Silver daily chart, with 200MDA
US500, with 200MDA
ASX200, with 200MDA
Gold Futures Technical Analysis
Gold futures monthly analysis continues to recommend a STRONG BUY with weekly analysis a STRONG BUY signal.
Technical indicators – Monthly Projections
| RSI(14) | Buy |
| STOCH(9,6) | Buy |
| STOCHRSI(14) | Overbought |
| MACD(12,26) | Buy |
| ADX(14) | Sell |
| Williams %R | Buy |
| CCI(14) | Neutral |
| ATR(14) | Less Volatility |
| Highs/Lows(14) | Buy |
| Ultimate Oscillator | Buy |
| ROC | Buy |
| Bull/Bear Power(13) | Sell |
Summary for Monthly forecast: STRONG BUY
Disclaimer
This news and any links provided are for general information only and should not be taken as constituting professional advice from Jaggards. Jaggards is not a financial adviser. We recommend you seek independent financial advice before making any financial decisions based on the information contained in this article.
