Few investors realise that central banks are nearly always too late to raise rates and tighten financial conditions. For that reason, gold has a history of rising on increased rates not the seemingly intuitive reverse of that. Yesterday we saw spectacular jobs figures for Australia which, when combined with high inflation, effectively force the RBA’s hand to raise rates. However, those reading this as the signal to buy equities and property because ‘everything is awesome’ may be sorely disappointed. Such record low unemployment figures (albeit measured before the impacts of Omicron), normally come at the end of economic cycles not the start.
