Australian Inflation Archives -

Gold Hits a New Historical Peak: Gold prices strengthened their gains during Wednesday’s trading,
with gold contracts reaching a new all-time high for the second consecutive day.
The ounce traded near the $2,790 level after closing Tuesday’s session at $2,774.8 per ounce.

Content
Gold

Inflation in Australia

U.S. Consumer Confidence

Gold Hits a New Historical Peak

Gold prices strengthened their gains during Wednesday’s trading,
with gold contracts reaching a new all-time high for the second consecutive day.
The ounce traded near the $2,790 level after closing Tuesday’s session at $2,774.8 per ounce.
In detail, spot gold prices rose by 0.66%, reaching $2,789.80 per ounce,
while December gold futures increased by 0.52% to $2,769.20 per ounce.
This rise in gold prices is attributed to harmful U.S. data showing a decline
in job vacancies to their lowest level since January 2021,
reflecting increasing weakness in the U.S. labor market.
This may prompt the U.S. Federal Reserve to cut interest rates by 25 basis points at its meeting.

Australian Inflation Slows at a Faster-than-Expected Rate
Data released by the Australian Bureau of Statistics on Wednesday morning
showed a notable slowdown in the annual inflation rate for the Consumer Price Index (CPI) in September,
exceeding expectations.
According to the data, Australia’s CPI grew by 2.1% year-on-year in September,
lower than the forecasted slowdown to 2.3%, after the index grew by 2.7% in August.
Every quarter, the CPI growth rate slowed in the third quarter,
recording 0.2%, below expectations of 0.3%.
The inflation rate was 1% in the second quarter of the year.

Rising U.S. Consumer Confidence in October Supports Gold Prices and Eases Recession Concerns
According to the Conference Board report released on Tuesday,
U.S. consumer sentiment significantly improved in October.
The Consumer Confidence Index rose to 108.7 points,
compared to the revised September reading of 99.2 points, surpassing expectations of 99.5 points.
Consumers’ view of current economic conditions also improved,
rising by 14.2 points to 138 points.
Consumer spending is a key component of the U.S. economy,
making up around 70% of economic activity,
and economists closely monitor it to gauge economic trends.
Following the release of this data, global gold prices rose to a new historical peak,
coinciding with a decline in the U.S. Dollar Index, supporting gold’s gains during trading.

Gold Hits a New Historical Peak

Geopolitical Tensions critical factor influencing financial markets: In the ever-changing landscape of global affairs,
the intensification of geopolitical tensions has become a critical factor influencing financial markets.
This report examines recent developments, focusing on the escalating crisis in the Red Sea region
the Houthi rebels and its potential impact on various market sectors.

Topics

Geopolitical tensions pressure on the markets

Continuing pressures and their impact on oil

The impact of Red Sea tensions on gold

Australian Inflation

Australian Central Bank

Upcoming US inflation data

The next reduction

Powell’s unenviable position

Geopolitical tensions pressure on the markets

The US Central Command reported on the X website (formerly Twitter) that the Houthis shot down about 18 drones,
two unmanned cruise missiles, and a ballistic missile.

Indicating that the worsening crisis is continuing, which may increase pressure on the markets,
and oil is the most affected by the ongoing conflict, especially after many shipping companies changed their
route from the Red Sea to turning around the continent of Africa.

Continuing pressures and their impact on oil

In light of the continuing crisis and the Houthis’ control over the navigational course of the Bab al-Mandab Strait,
this may lead to a shortage of oil supplies, which may lead to a shortage of supply in the markets,
which may push oil prices to rise again.

The impact of Red Sea tensions on gold

It is unlikely that the geopolitical tensions taking place in the Red Sea will affect the haven,
especially since the damage is concentrated in the weak navigational movement of commercial ships.
The impact will likely be greater on commodities, especially oil.

Australian Inflation

Australian inflation is declining, a sign of the success of monetary tightening on the small continent

At the beginning of Wednesday’s trading, the markets witnessed important data from Australia and Australian consumer price data on an annual basis,
which was around 4.9%, and experts were expecting 4.4%.
However, today’s data surprised the markets and provided the lowest reading in a long time, at 4.3%.

Australian Central Bank

The Australian Central Bank, after the bank’s interest rates, reach the highest levels of around 4.35%,
will greatly benefit from the decline in Australian inflation,
and this decline may lead to the bank’s survival during the next meeting scheduled to be held on February 6. At that time,
the idea will be to keep interest rates unchanged against the backdrop of the fear that the tightening will be exaggerated.
Disasters may occur in the Australian economy, in addition to the fact that the monetary tightening followed in 2023 to combat high levels of inflation has borne fruit.

Upcoming US inflation data

This is how the markets will read the upcoming US inflation data.
Data that may put the Federal Reserve in a big dilemma

In its last meeting in 2023, the US Federal Reserve, led by Jerome Powell,
presented to the markets the victory over the high levels of inflation and stated that a reduction in 2024
will be taken into consideration before high-interest rates begin to increase the damage to the US economy.

The next reduction

The US Federal Reserve will strengthen its position in overcoming high inflation
and will benefit if the upcoming data proves an actual decline.
Annual US consumer prices are expected to reach 3.2%, while the previous reading was around 3.1%.
In the next reading, if the decline is less than 3.1%, then it may begin. The Fed reduced interest rates by 0.25%.

Powell’s unenviable position

The idea that US inflation will return to rising will be considered the biggest nightmare for the US Central Bank during the current year. At that time, the markets may have many issues, the most important of which is that the Fed will extend the period during which it may cut the high-interest rate in the event of a reading higher than 3.2% or even a reading around 3.2%. It will be an indication that inflation is rising again, which may put Powell in trouble, and that the markets need more monetary tightening, which may bring us closer to the Federal Reserve’s expectations for a decline in economic growth of around 1.4% instead of 1.5%.

Geopolitical Tensions critical factor influencing financial markets