Investor appetite in commodities and equities was diminished overnight (AEST) by the US Federal Reserve Bank’s decision to sit tight on interest rates.
The headline ANZ China Commodity Index retreated 0.8%, with precious metals, industrial metals and energy all taking a hit.
Gold edged back 0.6% to US$3,369 ($5,242) an ounce, silver tumbled 2.3% to around US$32 an ounce, copper wiped off 1.2% to fetch US$9,420 a tonne, while aluminium and nickel fell 1.8% and 1%, respectively.
Iron ore prices were also weaker over concerns China’s proposed stimulus will not be enough to boost demand and a looming oversupply threat, with the key steelmaking commodity selling for just below US$98 a tonne.
Felix Ryan, FX Analyst for ANZ Economics and Research, says while the US Federal Reserve held policy steady as expected, it said uncertainty had “risen further”, citing upside risks to both inflation and unemployment, potentially putting its dual mandate in tension.
“How things pan out will depend on which risk dominates and whether the Fed needs to hold for longer if inflation pressures emerge or continue cutting if the labour market weakens,” Ryan notes.
“As Chair [Jerome] Powell said at the press conference that followed, policy is tight but not too tight, and the Fed is in a good position to wait and see.”
While the US held steady on rates, the UK is expected to cut rates tonight (AEST) by 25 basis points to 4.25%.
ANZ expects the Bank of England to deliver three further 25-basis-point rate cuts in the second half of this year.
Meanwhile, the S&P/ASX200 followed US markets down, edging back 14.3 points, or 0.17%, to 8,164 points by 10.30am (AEST).
This has wound back the five-day gains previously accrued and left the index little changed from the start of 2025.
Seven of the 11 sectors opened in the red, with materials losing 0.47% and the financial sector dipping 0.2%.
This saw lithium miner Pilbara Minerals (ASX:PLS) retreat 4.22% to $1.48, while fellow lithium producer Liontown Resources (ASX:LTR) fell 3.6% to $0.54 in early trade. Bellevue Gold (ASX:BGL) slumped 3.11% to $0.94.
Liontown yesterday (7 May) secured a $15 million interest free loan from the Western Australian Government under its Lithium Industry Support Program.
Global explosives supplier Orica (ASX:ORI) was an outlier, jumping 6.5% to $17.86 after announcing a 40% increase in net profit after tax pre-significant items to $250.8 million for the first half of 2025 compared to the prior half-year.
This prompted the mining services provider to declare an unfranked interim dividend of $0.25 per share, representing a payout of 49%.
Energy and industrials made modest moves higher, advancing 0.06% and 0.03%, respectively. Energy is the best performing sector, rising 2.02% over the past five sessions.
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 & US Federal Reserve
