Gold is again edging closer to US$3,300 ($5,136) an ounce as doubts arise over whether the US and China can settle their differences on the trade front.
While progress was made towards a trade deal between the two countries, ANZ Economist Madeline Dunk says scepticism on the success of the deals has crept back into discussions.
“The reality of President Trump’s tariff policy was laid out by the downgrade of the US by Moody’s Rating,” Dunk notes.
“The likelihood of a slowing economy and stronger inflation has subsequently reignited interest in the precious metal. Sentiment was also supported by ongoing buying from central banks.”
Despite the recent record price, China imported the most gold in a year in April, when total imports climbed 73% month over month to 127.5 tonnes.
The S&P/ASX200, meanwhile, has risen further following yesterday’s 25-basis-point rate cut by the Reserve Bank of Australia, advancing 50.7 points, or 0.61%, to 8,394 points by 10.30am (AEST).
The index has gained 1.38% over the past five trading sessions and is 2.57% off its 52-week high.
The ANZ tips a 0.25% rate cut, which will take the interest rate to 3.85% – the first time it has been below 4% since 2023.
Economist Sophia Angala says easing today is likely the “path of least regret”, given the uncertain global backdrop – notwithstanding the recent lift in equity markets – and encouraging inflation outcomes over the past two quarters.
“The most recent data on the consumer front suggests that the extent of the pick-up has softened relative to late 2024, and also relative to our (and we think the RBA’s) prior expectations,” she says.
Seven of the 11 sectors climbed higher after the opening bell. Utilities is the best performing sector, gaining 0.73% in early trade and 0.93% over the past five days.
The financial sector rose 0.14%, materials lifted 0.13% and energy edged up 0.11%. Industrials inched down 0.01%.
The gold miners were again among the top movers. West African Resources (ASX:WAF) rallied 8.58% to $2.53, Emerald Resources (ASX:EMR) jumped 8.33% to $4.55, Perseus Mining (ASX:PRU) added 7.37% to trade at $3.64 and Westgold Resources (ASX:WGX) lifted 6.45% to $2.73.
Critical minerals producer Adriatic Metals (ASX:ADT) surged 22.34% to $4.60 this morning (21 May) after it confirmed press speculation that it is in talks with Dundee Precious Metals (TSX:DPM) regarding a potential takeover.
Adriatic says it has agreed to provide Dundee with access to limited due diligence information.
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: ASX & iStock
