Gold's Fascinating Run, Silver and Mining Shares Next?

Members began their discussion by noting that the economic data received since the previous meeting had been broadly in line with the staff’s expectations. Recent data on inflation had been consistent with a further gradual easing in underlying inflationary pressures. Looking ahead, monthly CPI data for August – to be released the day after the meeting – were expected to show a sharp decline in headline inflation, partly because of federal and state government cost-of-living relief. But underlying inflation was expected to remain above target. Inflation for some components had remained high and persistent, but the easing in the rate of growth in advertised rents over the preceding three months was expected to feed through gradually to lower rent inflation in the CPI. Growth in GDP in the June quarter had been in line with the staff’s expectations. However, the composition of that growth suggested somewhat less underlying momentum in aggregate demand than the staff had assumed. Notably, household consumption had been significantly weaker than expected, while the offsetting stronger-than-expected outcomes were in components that tended to be more volatile from quarter to quarter. Members observed that weak growth in output was closing the gap between aggregate demand and the economy’s estimated supply capacity, but that the two were not yet aligned. Members discussed the implications of the weaker-than-expected outcome for household consumption in the June quarter. This was seen to have reflected a combination of a genuine slowing in momentum and the unwinding of one-off spending in the March quarter. Bank transaction data suggested that the rece post: RBA POLICY MUST REMAIN RESTRICTIVE UNTIL CONFIDENT ON PRICES post: RBA SEES POTENTIAL DELAY IN CONSUMPTION PICKUP FROM EARLY DATA post: RBA VIGILANT TO INFLATION RISKS, CPI GOAL TOP PRIORITY