US markets climbed on Friday ahead of Donald Trump’s inauguration as the 47th President on Monday (20 January) US time, which also lifted Australian markets on Monday morning.
The S&P/ASX 200 rose 22.50 points, or 0.27%, to 8,332.90 points as of 10.30am AEDT.
Over the last five days, the index has gained 0.47% and is currently 2.13% below its 52-week high.
Eight of the 11 sectors were higher. Materials was the best performing in early trade with a 0.21% tick up. Industrials gained 0.18% and energy was up 0.05%.
The ASX has jumped over 2% since news of Trump’s election victory spread through markets last November.
ANZ Senior Commodity Strategist Daniel Hynes says the outlook for commodity markets will remain mired in uncertainty in the short term.
“Supply and demand fundamentals are being distorted by geopolitical events, currency fluctuations and market speculation,” he notes.
“This should lead to a high level of volatility in the initial months of the year. It is unlikely we will see the longer-term trends emerge until the second half of the year.”
This is largely due to Trump’s retaking the White House, with his presidency expected to “be more disruptive than destructive”, according to Hynes.
“Even so, his proposed tariffs on China and other major trading partners could have an impact on trade flows of key commodities,” he says.
Saxo Bank Head of Commodity Strategy Ole Hansen said last Friday (17 January) a broad commodities rally continued over the week, before some profit-taking emerged ahead of Trump’s inauguration speech.
“The Bloomberg Commodity Total Return Index, which tracks a basket of 24 major commodities – split almost evenly between energy, metals, and agriculture – reached a 25-month high this week, with all three sectors showing gains, before some profit taking started to emerge ahead of Monday’s key risk event, the inauguration speech by President Trump,” Hansen said.
Saxo forecasts that in 2025 crude oil will stay mostly rangebound within a US$65-85 ($105-137) per barrel range, gold will reach US$2,900 per ounce, silver will jump to US$38 per ounce and copper will edge up to US$4.80 per pound.
In early trade Monday, among the S&P/ASX 200 movers were lithium miner Pilbara Minerals (ASX:PLS) with a 3.35% boost to $2.47 and uranium explorer Deep Yellow (ASX:DYL), which climbed 3.09% to $1.34, and fellow uranium play Boss Energy (ASX:BOE), which shifted up 2.8% to $2.94.
Gold producers Bellevue Gold (ASX:BGL) and Westgold Resources (ASX:WGL) opened lower the start the week, with Bellevue down 2.46% at $1.09 and Westgold slipping 1.12% to $2.66. Nickel Industries (ASX:NIC) dipped 1.16% to $0.85.
At the small cap end, gold and base metals explorer Cullen Resources (ASX:CUL) advanced 25% to $0.005 on no news, while lithium-boron developer Ioneer (ASX:INR) rallied nearly 21% on news it has secured a US$996 million loan from the US Department of Energy to support the development of an onsite processing facility at its Rhyolite Ridge Lithium-Boron Project in Nevada.
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: Saxo Bank & iStock
