Rates Rise Again as Gold Waits for Direction

The RBA has lifted interest rates by another 25 basis points, taking the cash rate to 4.35%, adding further pressure to Australian households already feeling stretched by mortgage repayments, rent increases and day-to-day living costs. While the move was largely expected by markets, the bigger question now is whether this is the final hike for the cycle, or whether inflation still has enough momentum left in it to force the Reserve Bank higher again over coming months.

Inflation remains stubborn in several parts of the economy, particularly around insurance, energy, construction and services. While fuel prices have remained relatively subdued recently compared to earlier spikes this year, there is still concern that global instability could quickly reverse that trend. The RBA finds itself in a difficult position. Raise rates too aggressively and household spending weakens further. Pause too early and inflation risks becoming embedded for much longer.

Globally, the backdrop remains tense. The conflict in Ukraine has now dragged into its fourth year, continuing to place pressure on energy supply chains, manufacturing costs and geopolitical stability across Europe and beyond. At the same time, ongoing low-level conflict and posturing between Iran and the United States continues to create uncertainty through key oil and shipping corridors. Markets appear somewhat desensitised to conflict headlines at the moment, but the economic effects underneath are still very real.

Gold has remained relatively calm through all of this, continuing to trade below its 50-day moving average without showing strong urgency to break higher. That hesitation is telling. Markets appear to be waiting for a more decisive catalyst before aggressively pushing precious metals upward again. A sharper inflation breakout, worsening conflict, or signs of weakening economic growth could all quickly shift sentiment back toward safe haven assets.

For now though, gold appears comfortable sitting in a holding pattern. Investors are watching inflation, central banks and geopolitical developments closely, while waiting to see whether the second half of the year brings stability, or another round of economic pressure.
Enjoy today’s charts 

Gold daily chart, with 50MDA

Silver daily chart, with 50MDA

US500, with 50MDA

ASX200, with 50MDA

Auhtor

Hercules Tsoutsas

With deep expertise in gold, silver, and commodities markets, Hercules has spent years helping investors navigate the ever-changing landscape of precious metals, from market movements and trends to smart buying decisions.