Harmovest Capital | Daily Report: Will Central Banks Keep Rates Elevated Amid Rising Inflation?

09 April 2026

Key Highlights

• New Zealand keeps interest rates unchanged

• Inflation is expected to rise in the coming period

• Global central banks are likely to face significant challenges

Market Review

New Zealand Holds Interest Rates Steady

The Monetary Policy Committee decided to maintain the Official Cash Rate (OCR) at 2.25%, noting that recent developments in the Middle East have significantly shifted the outlook for inflation and economic growth. In the near term, inflation is expected to rise while economic activity may soften. The Committee remains alert to inflation risks and stands ready to take action if necessary to ensure price stability over the medium term.

Ongoing geopolitical tensions have disrupted global supply chains and pushed energy prices higher, contributing to increased inflationary pressures and slower growth across many economies. Financial markets have also experienced heightened volatility, with interest rates trending higher globally.

In New Zealand, the future path of inflation will largely depend on the evolution of geopolitical risks and the extent of supply chain and energy market disruptions. While rising costs may create upward pressure on prices, weaker demand and excess capacity in the economy are expected to help contain sustained inflation.

Overall, the decision to keep rates unchanged reflects a careful balance between managing inflation risks and supporting economic recovery, as policymakers continue to monitor the medium-term inflation outlook closely.

Impacted Financial Instruments

• New Zealand Dollar (NZD)

• Gold

• S&P 500

Summary

Following New Zealands decision to keep interest rates unchanged while signaling rising inflation expectations, markets anticipate that global central banks may maintain higher interest rates for longer.

This outlook has led to expectations of reduced demand for precious metals, which may limit the upward momentum in gold prices in the near term.

Today's Key Events

• FOMC Monetary Policy Meeting Minutes

• U.S. PCE Price Index

• U.S. Gross Domestic Product (GDP)

Today, markets will closely monitor the U.S. PCE Price Index. Due to the impact of the Iran conflict, inflationary pressures are expected to remain elevated, which may provide short-term support to the U.S. Dollar Index.

Impacted Financial Instruments

• U.S. Dollar

• Precious Metals (Gold, Silver, Platinum)

• U.S. Equity Indices

Today's Trading Bias

Bullish — Precious Metals

Market Sentiment Analysis

Fear & Greed Index

The Fear & Greed Index is a key indicator used to measure market sentiment, reflecting whether investors are currently driven by fear or greed. According to the latest data, the index stands at 31 (Fear), compared to the previous reading of 30, indicating that risk-off sentiment remains elevated in the market.

The Iran conflict has significantly driven energy prices higher, raising market concerns about persistent inflation. As a result, central banks may maintain current interest rate levels, gradually increasing demand for safe-haven assets. In addition, the U.S. economy continues to be affected by tariffs, further boosting demand for defensive assets, including gold and silver.

Given the sustained risk-off sentiment, investors are advised to consider positioning long in gold, silver, and U.S. Treasuries.

Technical Analysis

XAUUSD (Gold)

Following U.S. President Trumps announcement of a two-week ceasefire with Iran, market risk-off sentiment eased significantly, while U.S. 10-year Treasury yields began to trend lower, indirectly supporting further upside potential for gold.

From a technical perspective:

• Gold has broken above the 4787 resistance level

• The short-term trend is expected to remain strongly bullish

• Investors are advised to maintain long positions

• Key support level to monitor: 4700