Gold Rally Lifts ASX, But Further Uncertainty

The ASX 200 closed 0.7% higher, a second consecutive week in the green amid Donald Trump’s shifting comments on the Middle East conflict, on Wednesday evening. Despite an increase, uncertainty is set to persist, with investors lacking clarity on when the conflict will resolve.

Gold Sector +6.79% - After falling ~8% - its worst monthly decline since 2008, gold rebounded strong this week, driving gains across ASX-listed gold miners, as reflected in this week’s top performers.

While gold is viewed as a defensive asset, its recent decline highlights its sensitivity to interest rates. Higher interest rates increase the opportunity cost of holding non-yielding assets like gold, making cash and bonds relatively more attractive.

This week’s rebound appears driven by growing expectations of US interest rate cuts late this year, which lower yields and makes gold more attractive.

The week’s best performers 

Greatland Resources Limited (ASX:GGP) +31.66% - Greatland surged after delivering a significant upgrade to its resources, with its 12-month drilling campaign exceeding initial estimates by 150%, from 4.8 million ounces of gold to 8.0 million.

Predictive Discovery Limited (ASX:PDI) +20.14% - Predictive Discovery rallied alongside the broader gold sector, with further support from its proposed merger with Robex Resources, a West African gold producer. Described as a “merger of equals”, its rise reflects the market's ongoing assessment of the strategic merits of the merger, signalling long-term production potential.

Northern Star Resources Ltd (ASX:LTR) +18.11% - After a poor few months amidst the global gold sell-off, Northern Star rebounded following quarterly production of 381,000 ounces and a $500m share buyback announcement. Share buybacks at this scale typically signal management confidence that the stock is undervalued.

This week's worst performers

PEXA Group Limited (ASX:PXA) -21.85% - PEXA, a digital property technology company that operates electronic lodgement and settlement network, was the worst performer on the ASX200 this week following a “double-edged” regulatory outcome. The NSW Independent Pricing and Regulatory Tribunal proposed capping the fees PEXA can charge for property settlement using a cost-based framework, raising concerns around future earnings.  

4D Medical Ltd. (ASX:4DX) -10.19% - After being last week’s top performer rising over 46%, 4D Medical, a medical technology company declined as investors moved to take a profit.

Reece Limited (ASX:PDI) -7.65% - Reece declined this week amid ongoing concerns around housing and construction activity, in Reece’s key markets: Australia and the US. With higher interest rates which limits renovation demand and building approvals, investors remain cautious on future growth. The slight drop in price appears to be a result of structural issues rather than company-specific news.