Gold’s bullish run has backed off somewhat as Israel and Lebanon’s Hezbollah move closer to a potential ceasefire deal.
Incoming US President Donald Trump’s proposed trade policies also weighed on sentiment, ANZ analysts Sophia Angala, Brian Martin and Daniel Hynes say in a research note on Tuesday (26 November).
Gold edged back 1.4% to around US$2,687 ($4,131) an ounce on Monday. It retreated further on Tuesday morning to US$2,628.
The Israeli ambassador to the US says Israel is potentially days away from a ceasefire agreement with Hezbollah.
“Axios also reported that Israel and Lebanon have accepted the terms of a ceasefire agreement,” Angala, Martin and Hynes say.
“That saw investors dump haven assets they had built up over the past few weeks as geopolitical tensions rose. Adding to this was less inflationary trade policies from the Trump administration.”
Meanwhile, a weaker US dollar pushed base metals north. Aluminium was also stronger after major Russian producer Rusal said it would slash output by up as much as 13% on the rising cost of alumina.
“The key material for the metal now makes up around half the cost of making aluminium, up from 30-35% last year,” the analysts note.
“It will reduce output by 250kt in the first stage of its capacity utilisation program. This comes not long after China said it was removing an export rebate that could be a significant disruption to global trade.”
The S&P/ASX200 advanced 11.30 points, or 0.13%, to 8,428.90 points at 10.32am AEDT.
Nine of the 11 sectors rose, with materials the top mover. The sector advanced 0.18% on Tuesday morning and has gained 0.35% over the past five days. Industrials climbed 0.10%.
Gold miners Emerald Resources (ASX:EMR), Bellevue Gold (ASX:BGL) and Westgold Resources (ASX:WGX) started the trading session in the red. Emerald slipped 4.04% to $3.56, Bellevue was down 3.67% at $1.25 and Westgold retreated 3.49% to $2.77.
Uranium explorer Deep Yellow (ASX:DYL) was also lower in early trade with a 4.31% shift down to $1.22.
The S&P/ASX200 is Australia’s leading share market index and contains the top 200 ASX-listed companies in terms of market capitalisation, and accounts for about 80% of the country’s equity market. The index is designed to measure the performance of the 200 largest index-eligible stocks listed on the ASX by float-adjusted market capitalisation
It is recognised as the institutional investable benchmark in the country.
Write to Angela East at Mining.com.au
Images: Stock & ASX
