Australia's Central Bank (RBA) raised their interest rates by 25 basis points to 3.1 percent. This was in line with market expectations so that it wasn’t that surprising.

The RBA boss accompanied the decision with a hawkish statement that overshadowed interest rate expectations going forward. The report serves as a provision for the Australian Dollar.

That is especially to counter the strengthening of the US dollar over the past two sessions. AUD/USD was recorded to climb around 0.5% to the range of 0.6730s in the middle of the Asian session (6/December).

The RBA's decision this morning brought Australia's interest rate to its highest level since 2012. Nevertheless, central bank officials are still hinting at raising interest rates further to control inflation. 

Inflation in Australia was at 6.9%

Inflation in Australia is too high, at 6.9% across the year to 0ktober. That was said by RBA Governor Philip Lowe. Global factors underlie most of this high inflation.

However, there is also a stronger role of domestic demand compared to the ability of the economy to meet it. Returning inflation to the target (central bank) demands a more sustainable balance between demand and supply.

The board (RBA) expects to raise interest rates further over the coming period. However, Lowe also said that the path is yet to be determined.

The amount and timing of future rate hikes will continue to be determined based on future data and the board's assessment of the inflation outlook and the labor market.

RBA may Increase the Rate Again Further 

Furthermore, Lowe's remarks prompted analysts to raise the RBA's terminal interest rate projections, as The Guardian reported. The Commonwealth Bank of Australia (CBA) expects the highest interest rate.

It means that it maybe reach 3.35%, or 25 basis points higher than their previous estimates. David Plank, chief Australian economist at ANZ, predicts the RBA will raise interest rates three more times.

The aim is to reach a peak of 3.85% in May 2023. Elsewhere, The weakening US dollar and US bond yields were again used by gold to gain a higher position.

It is especially after falling earlier this week due to improving US economic data. Today, investors are again considering the possibility of a slowdown in the pace of the Fed's rate hike. 

Keep an Eye on Inflation and US Interest Rate Announcements 

However, the increase in gold prices is expected to be limited due to technical factors alone. The analysts are watching Gold prices along the curve here already fall.

There was a slight weakening of the Dollar. That is why; this commodity is just bouncing up from low levels. It was said by Bart Melek, analyst at TD Securities, who is watching from a technical standpoint. 

Market participants expect a 50 basis point rate hike at the last FOMC meeting of the year. Although lower than the previous ones, high rates tend to dampen buying interest in gold because it does not provide yields. 

Some investors are also still watching for excellent US economic data. It is feared that this could lead the Fed to raise interest rates again beyond expectations. 

Market Sentiment will affect on Gold 

Before the release of the Fed's monetary policy, the America's CPI inflation data, which will be published first, is also the focus of the market. Therefore, the price of gold is expected to be difficult to gain a significant increase. 

The main driver for gold right now is market sentiment towards the United states Dollar. It was coupled with the wait for the Fed's rate hike prospects as well as already taming inflation signals.

This was said by the independent analyst Ross Norman. The market appears to be range-bound with a downward bias.

That is although seasonal physical gold sales are quite good with support seen at $1,760. Meanwhile, the trading volumes in the market will decline as traders compile year-end books