Issue #17 | Rates Up, ASX Gold Merger, World on Edge​​​​​​​​​​​​​​​​

ASX - Top 3 Winners & Losers
Deals Down Under - Two Gold Giants Merge
Global Markets - Project Freedom
Other News - Aussie Politics, Sport and Culture

The ASX 200 finished up 0.2% for the week after its largest fall in seven weeks on Friday, with the benchmark dropping 1.51%. Fresh trouble between the US and Iran wiped over $50bn in the market’s value and sent oil prices up. At home, the Reserve Bank of Australia (RBA) decided to increase the cash rate by 0.25% to 4.35% - its third rate hike this year to mitigate Australia’s rising inflation.

The week ahead could get messy.

The Iran War could spike volatility in the market at any point, and the highly anticipated Federal Budget will be delivered tomorrow night. The budget is set to bring in major tax reforms, with reports suggesting that the Labor government will make changes to negative gearing and capital gains tax (CGT), which will have major effects on housing, shares, and businesses. The anticipated, but unconfirmed, changes have already drawn significant debate across the media and industry.

This week’s best performers

Virgin Australia Holdings Limited (ASX:VGN) +16.67%

Virgin found some relief this week after being among the beaten-down stocks amid the Middle East conflict. As oil prices spiked earlier this year, so did jet fuel — Virgin’s highest cost — and markets quickly sold off VGN. Down over 27% for 2026 so far, investors are buying back in on hopes of a 2026 recovery, with its half-year results showing signs of demand recovery in domestic and short-haul international travel. 

Capricorn Metals Ltd (ASX:CMM) +15.80%

The WA gold producer had a strong week after presenting their vision of a “high margin, long mine life gold business with compelling growth” at the 2026 Macquarie Conference which attracts over 800 institutional investors. Investors clearly liked it, with the stock rising over 15% for the week, aided by a strong week for gold, rising 2%. 

Develop Global Limited (ASX:DVP) +12.71%

The zinc-copper WA miner has seen significant interest in 2026, rising over 30%, riding the AI-driven demand wave for copper, a critical commodity for data centre infrastructure. Management is bullish on the company’s operations, holding a 20% stake, reflecting strong internal confidence and alignment with shareholders. 

This week’s worst performers

Tabcorp Holdings Limited (ASX:TAH) -35.19%

Tabcorp had a horror week after revealing it is being investigated by AUSTRAC, Australia’s anti-money-laundering agency, after failing to inform AUSTRAC of illegal betting activity and credit card fraud. Tabcorp could face a significant financial penalty if the investigation proceeds to legal action, with other financial institutions historically receiving hundreds of millions of dollars in fines. Former AFL boss and now CEO of Tabcorp, Gillon McLachlan announced the betting company would “work constructively with AUSTRAC through this process.”

4DMedical (ASX:4DX) -20.15%

4DX was having a great year, up 50% for 2026 at its peak in April after EU certification, allowing the lung imaging technology company to commence commercial operations in Europe. But ever since, the stock has fallen sharply — now down nearly 30% for the year. Investors are selling off, either taking profit after the stock’s near 1,000% rise over the past year or questioning whether the valuation can hold up against peers.​​​​​​​​​​​​​​​​

Yancoal Australia Ltd (ASX:YAL) -13.28%

A tough week for coal, with prices and sector sentiment weakening, dragging Yancoal down with it. As one of the ASX's largest dedicated coal miners, it copped the brunt of the move. With no company-specific news, Yancoal’s fall reflected the market rotating away from the coal sector due to concerns around fossil fuel exposure.

This week, it was reported that the boards of both Regis Resources (ASX:RRL) and Vault Minerals (ASX:VAU) unanimously recommended the $10.7bn merger, which would create the third-largest gold miner on the ASX. Under the deal structure, Regis will hold the controlling 51% stake in the merged entity, with Vault shareholders taking the remaining 49% - making it more of a Regis takeover. 

Regis (ASX:RRL) fell 3.25% this week, while Vault (ASX:VAU) rose 4.44% — exactly what you’d expect when a merger is announced, with the acquirer selling off and the target getting a boost.​​​​​​​​​​​​​​​​

Both miners operate in WA’s Goldfields region, the remote mining heartland of WA that produces the bulk of Australia’s gold. Regis is the larger of the two, operating multiple mines north of Kalgoorlie, and holds a 30% stake in one of Australia’s largest gold operations with global mining giant AngloGold Ashanti. Vault is more concentrated, running two mines in the same region along with a site in Canada that is due to start producing soon. Together, they will sit on a mineral resources base of 20.5 million ounces and produce over 700,000 ounces annually. 

The price of gold has rocketed in the past couple of years, going from $US2100 per ounce in early 2024 to a record high of nearly $US5600, with today’s price sitting around $US4700. For Australian gold producers, it only costs them $2,000-$3,000 to extract an ounce of gold, so with gold prices soaring in recent years, the margins have followed. 

Together the two companies will enter the market with nearly $2bn in cash, and with management already hinting at more acquisitions, operational expansion or returns to shareholders. Genesis Minerals, the $7bn Kerry Stokes-backed rival, is the name most analysts are circling as the next target — and even Regis CEO Jim Beyer hasn’t ruled it out. 

A gold deal like this doesn’t come out of nowhere. The ASX has been in the middle of a M&A gold rush in the past two years driven by rising gold prices. What’s happening in gold is a preview of what tends to follow in other commodities when prices surge. It follows a similar process: margins expand, balance sheets grow stronger, and then a merger or acquisition. If copper and uranium prices hold at current levels, don’t be surprised if we see deal activity there soon.

The White House declared Operation Epic Fury effectively complete this week, with the Trump administration quickly pivoting to "Project Freedom", a military-backed effort to escort stranded commercial vessels through the Strait of Hormuz after more than two months of disruption. Markets didn't need much convincing. Brent crude tumbled 8% to US$101 a barrel, global equities rallied broadly and hopes grew that US-Iran negotiations could finally stabilise one of the world's most critical trade routes.

Within 36 hours, Project Freedom was paused.

Iran's parliamentary speaker warned the conflict had "not even begun", as US destroyers came under a barrage of Iranian drones, missiles, and small boats. Tehran also established the Persian Gulf Strait Authority — a new body to vet and tax vessels seeking passage, in violation of international maritime law. The operation's fatal blow, however, came from an unexpected direction: Saudi Arabia and Kuwait cut US access to their bases and airspace, stripping Washington of the aerial cover needed to protect ships through the strait. Even its closest regional allies weren't willing to back a forceful reopening.

That matters because roughly 20% of the world's oil and LNG moves through Hormuz. Iran doesn't need to win militarily to hurt global markets, it just needs to keep the strait unstable. The RBA underscored the local stakes this week, raising rates for a third consecutive meeting to 4.35%, explicitly citing the Middle East conflict as a key driver of Australia's inflation problem.

Brent traded around US$116 for much of the week before dropping toward US$97 on Thursday on peace deal hopes, yet the muted reaction to Project Freedom's collapse suggests markets are growing numb to the headlines. Until the Strait is functioning normally and a formal deal holds, it will continue to serve as both an economic and geopolitical pressure point for global markets. 

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