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Greetings and welcome to HotCopper‘s market summary for Tuesday, I’m Jon Davidson. For a second day, the risk of a fresh European vs. U.S. trade war has rattled the market and, at the same time, lit a fire underneath metals.
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By now, you’ve likely heard about the latest from the President of the United States: He still wants the U.S. to take over Greenland, we still don’t know what the true overall ambition is, but it’s clearly become something of a focus point in Washington. In turn, safe-haven precious metals are still going higher.
But precious metals aren’t an Americentric story. There’s massive gold demand all around the world, from international central banks widely perceived as a hedge against the U.S. dollar; that’s spreading into silver.
The gap between Chinese and Western silver benchmarks is now $11 USD apart in China’s favour, with huge demand for physical silver in that country complicated by export restrictions and competing industrial demand for the manufacturing of things like solar panels.
In the meantime, Indian silver demand is at record highs, and the Indian Nifty Metals Index is having its best start to a year since CY18. We’ve seen some of that in Australia, too, but while all of this geopolitical chaos plays out, we also saw a long weekend in the U.S., and so the local market is erring on the side of caution on Tuesday. That is to say, without a green Wall Street overnight to take cues from.
It looks like the risk of a fresh trade war between the EU and the U.S. is too much for Australian investors operating on optimism around a commodities supercycle alone, and depending on what the American markets do, we could be in for a third day of pain on Wednesday (as this Greenland thing doesn’t appear to be receding from headlines). The question is whether that’s by design, and to what end.
Looking around the local market: BHP (ASX:BHP) posted its latest results on Tuesday, and while copper guidance was lifted and iron ore output remains strong, the costs of a Canadian potash project have blown out, leaving the Big Miner red and further away from the $50-a-share record.
Elsewhere, Origin Energy (ASX:ORG) has confirmed Australia’s largest coal plant will continue running until 2029. The day’s biggest faller was child safety tech app QORIA Ltd (ASX:QOR), which flagged rising staff costs on Tuesday while claiming AI was reducing costs, leaving investors perhaps smelling a fishy story. Finally, 4DMedical (ASX:4DX) has been cooling off from its recent run, falling back below $4.50/sh after notching $5 per share valuations based largely on hype alone.
That’s The ASX Today for Tuesday, I’m Jon Davidson, have an exuberant evening.
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