Josh Gilbert, Market Analyst at eToro Group Ltd, shares his three things to watch in Australia in the coming days.
AU Monthly Inflation
The last monthly CPI came in much hotter than expected, with headline inflation accelerating to 2.8% year-on-year. It was a sharp reversal from the steady disinflation we had seen over recent months, taking inflation back towards the top of the RBA’s target band. Trimmed mean inflation also jumped from 2.1% to 2.7%, suggesting that price pressures are proving stickier than policymakers had hoped, particularly in housing.
The data was a setback for those who expected continued easing following the RBA’s rate cut in August, with the market expecting a hold at the end of this month. However, expectations for a cut in November remain, as the board has suggested that more easing may be on the horizon before the end of the year.
This week’s CPI print will determine whether the RBA is likely to provide its next rate cut in November, just ahead of arguably the biggest discretionary spending period for Aussies, with Christmas and Boxing Day inching closer. The board remains cautious, and although markets still expect another cut before year-end, if we see another report similar to last month, that expectation will likely diminish.
US Core PCE
Last week, the Federal Reserve cut interest rates for the first time since 2024, and this week, they’ll get more insight into their fight against inflation. The core PCE price index, which strips out food and energy and is closely watched by the Fed, is expected to rise around 0.2% month on month in August after a 0.3% gain in July. That would keep annual core inflation steady at 2.9%, underscoring how sticky price pressures remain. Headline PCE is also likely to show a modest increase. Personal spending is forecast to rise 0.5% for a second month, supported by back-to-school shopping and steady services demand.
The Fed appears to be tilting its priority away from purely tackling inflation risks towards paying more attention to the cooling labour market. Even with core inflation still elevated, signs of softer wage growth and easing demand are giving policymakers more room to lower rates. A stronger-than-expected PCE print could delay the timing of rate cuts, but if inflation lands broadly in line with expectations, the Fed will likely feel comfortable with the two rate cuts that have been put on the table this year. That path matters for investors, with rate-sensitive sectors such as tech and real estate poised to benefit most if the Fed proceeds with easing, while a delay could weigh on those areas and support the dollar instead.
Gold hits new highs - can it continue?
It’s been a stellar year for gold, with the precious metal up 39%, making it one of the best-performing assets in 2025, enjoying its best year in 15 years. Last week, it hit another new record, topping out just above USD$3700 an ounce. This performance builds on the 27% gain we saw in 2024, underpinned by rising investor allocations, uncertainty becoming the new normal, and consistent central bank buying. In today’s world of inflation worries, tariffs and geopolitical conflicts all creating uncertainty, gold as a portfolio stabiliser continues to prove its worth.
So what’s next for gold? The fundamentals point to further upside, supported by further rate cuts from the Fed, a weaker US dollar, and resilient investment demand. With gold already outpacing major equity indices and with central bank buying adding to the momentum, the precious metal is set to remain a key focus for investors as uncertainty remains.
Ultimately, for long-term investors, gold has clearly justified its position in a diversified portfolio. It offers some stability against risk events while providing a reliable longer-term store of value and, importantly, as a portfolio diversifier. Even in the age of digital assets and complex financial products, a bit of that classic yellow metal can provide balance and reassurance.