Gold surge helps ASX to a weekly rise

Gold surge helps ASX to a weekly rise

Surging prices for Australian gold miners helped the overall share market rally on Friday, up an impressive 1.4%, achieving a 0.9% rise for the week.

Investors were more positive about the chances of fewer interest rate rises in the US this year after weaker June US jobs data, helping to boost the ASX 200 index by 119.80 points to reach 8844.30 points, with utilities the only one of the 11 sectors to fall.

With US hiring slowing sharply in June, more investors believe the Fed will keep official interest rates on hold at its next meeting, with interest rate swaps implying an 18% chance of a July rate increase by the Fed, down sharply.

Gold prices march higher

Gold prices climbed 1.3% to almost $US4,200 an ounce which sent the share prices of local gold producers higher as they overcame recent losses. Catalyst Metals (ASX: CYL) shares added an impressive 19.2% to $6.09 while Newmont shares (ASX: NEM) jumped 5% to $142.17 and Northern Star shares (ASX: NST) rose 11.8% to $22.16. Genesis Minerals (ASX: GMD) shares leapt 16.7% to $6.29 after producing 70,767 ounces of gold in the June quarter and taking 2025-26 output to 285,400 ounces. It was a solid day for healthcare shares as the beleaguered CSL (ASX: CSL) continued to recover some of its recent losses, gaining 3.5% to $121.81. Cochlear shares (ASX: COH) were also up 3.8% to $124.96 while sleep apnea company ResMed (ASX: RMD) shares were up 4% to $30.50.

Fortescue hit by China action.

There were some interesting moves among the big iron ore companies, with Fortescue shares (ASX: FMG) dropping 3.2% following reports that China’s state-backed buyer of iron ore planned to restrict some of the company’s inventories held at mainland ports.

China Mineral Resources Group officials asked mills and traders holding Fortescue’s Super Special Fines to take deliveries before July 15, after which the furnace feedstock would be blacklisted, according to reports on Bloomberg. BHP shares (ASX: BHP) bucked the downward trend, rising 1.6% to $60.50 while Rio Tinto shares (ASX: RIO) were down 0.1% to $171.16. Once again utilities were the weakest sector with Origin shares (ASX: ORG) losing 1.2% to $10.36 and Meridian Energy shares (ASX: MEZ) down 0.6% to $4.71. Banks were largely higher, led by Commonwealth Bank shares (ASX: CBA) up 2.4% to $165.02, after it cut 170 jobs in its technology division. ANZ shares (ASX: ANZ) also rose 1.4% to $35.26, Westpac shares (ASX: WBC) were up 0.7% to $35.69 and National Australia Bank shares (ASX: NAB) were up 0.4% to $38.57. Share market operator ASX (ASX: ASX) had a bad day, with shares falling 1.4% to $51.52 after the Federal Court ordered it to pay about $23 million after admissions that it had made misleading statements about a bungled technology upgrade. Shares in Suncorp (ASX: SUN) fell 3.7% to $18.63 after the big insurer warned of lower growth in gross written premiums while shares in PEXA (ASX: PXA) fell 21.3% to a record low of $8.54 after the NSW pricing regulator recommended a 20% cut to its allowable revenue. The company is pushing to have any fee reductions phased in over four years.

The week ahead

There is a raft of new economic data out this week with the main local interest in the ANZ job ads on Monday.

In the US the minutes of the last Federal Reserve policy meeting will be the main attraction and there will also be the release of the latest services PMI.

The US June quarter earnings season is also kicking off, with PepsiCo and Delta Air Lines reporting and the big US banks set to report the following week.

Also in focus will be the yield on 10-year Treasury bonds, which fell back after the release of weaker US hiring data.