Australia’s central bank has hiked interest rates in more than a decade for the first time. On Tuesday, the Reserve Bank of Australia (RBA) hiked the benchmark interest rate from 0.1 percent to 0.35 percent.
Millions of Australians will potentially face higher repayments on their home loans. For example, the average holder of 500 000 AUD (roughly 355 000 USD) Mortage could pay an extra 65 Australian dollars a month in repayments if the bank pass on the higher interest rate in full, wrote Aljazeera.
Gold price dropped on Tuesday (3. May) to the lowest since mid-February as imminent interest rates hike by the U.S. Federal Reserve are highly likely.
The Federal Open Market Committee of the United States will convene later in the day (3. May) to discuss interest rates and is expected to raise borrowing prices by half a percentage point when it publishes its decision on Wednesday (4. May).
(Reuters – Fed rate hikes ahead)
Contracts tied to the Fed’s policy rate now show heavy bets on interest rates rising to 3%-3.25% by the end of the year, putting borrowing costs well into territory U.S. central bankers believe will put the brakes on growth, wrote Reuters.
*Red lines are downtrend. The heavy red line is the long-term trendline.
*Green lines are uptrend. The heavy green line is a long-term trendline.
*Blue lines are short term support & resistance lines
(Picture 1. Trendlines & Support/Resistance)
You can check more interactive graphs from our Tradingview account.
(Picture 1. zoomed in)
You can go check more interactive graphs from our Tradingview account.
(Picture 2. – Garterly pattern, moving averages, and RSI)
In conclusion, all the fundamental signs indicate a bearish gold movement because of the FED rate hikes to soften inflation pressure. On the other hand, most technical indicators show a strong potential upward trend.
Disclaimer: This article is for informational purposes only and is not intended as an investment analysis or recommendation to sell or buy commodities. Tavex is not responsible for any decisions made based on this information. Investing is associated with opportunities and risks, and the market value of commodities can both increase and decrease. Past or future yields on the commodities and financial ratios shown above do not represent a promise or an indication of future earnings