ASX200 and gold sets fresh record high as trader bank on February rate cut from RBA

Gold miners are among the stocks glistening on the Australian market as the ASX200 resets the bar after touching a fresh peak of 8563 points in early trade on Friday.

The index closed at 8493.7 on Thursday — fractionally below its highest ever closing high of 8515.2 — as investors continue to trade on an earlier-than-expected interest rate cut by the Reserve Bank.

By 9am, the ASX had retreated to 8535.6 — still up 0.5 per cent for the day.

AMP chief economist Shane Oliver said the market was in a bullish mood following Wednesday’s inflation data.

“Our market was a relative laggard last year compared to global markets, in particular the US.”

“Part of that was we don’t have a large exposure to tech, and a big part of it was that other central banks were cutting rates and we weren’t,” he said.

“Now it looks like rate cuts are imminent in Australia at a time when the US Federal Reserve is becoming more cautious, so there is confidence in Australia getting a rate cut and that will ultimately be positive for the economy and local business profits.”

Utility stocks proved a drag, down 2.4 per cent, while all other sectors were in positive territory, led by real estate, mining, IT and health care.

Gold hit a fresh record high as the US dollar pushed lower and traders sought safety amid concerns over President Donald Trump’s tariff measures.

Bullion surged as much as 1.4 per cent to $US2798.59 an ounce in the US overnight Thursday, surpassing its previous all-time high set in October. A weaker dollar makes bullion more appealing for investors holding other currencies as it is priced in the US currency.

Shares in Super Pit owner Northern Star Resources were up 1.6 per cent to $17.13 at 8am amid a broad market rally that took the ASX200 to a fresh all-time high.

Ramelius Resources climbed 2 per cent to $2.45, Newmont surged 4 per cent to $69.33, De Grey Mining was up 2.6 per cent to $1.99 and Evolution Mining was 1.6 per cent higher to $5.74. Bellevue Gold rocketed 4.4 per cent to $1.26.

Perseus Mining, Regis Resources, Genesis Minerals, Resolute Mining and Westgold Resources all notched solid gains but Gold Road Resources was off almost one per cent $2.46.

The softness in the greenback came after a widely anticipated rate cut by the European Central Bank and the latest data that showed inflation-adjusted gross domestic product in the US increased an annualised 2.3 per cent in the fourth quarter after rising 3.1 per cent in the prior three-month period.

The precious metal has been trading in a choppy fashion since the US elections, with Mr Trump’s decisive victory initially sparking a sell-off as investors flocked to riskier assets linked to his pro-growth agenda. But it has clawed back ground in recent weeks, as the president’s repeated threats on tariffs reginited haven demand.

“You have the uncertainty of what’s going to happen with Trump, with his policies and tariffs and things like that could impact the growth of the United States,” said Phil Streible, chief market strategist at Blue Line Futures.

“When you get rising inflation and you get declining growth, you get stagflation, then gold is one of the best-performing commodities in that environment.”

“I think that’s what people have been positioning for. There’s renewed strength, renewed desire to be involved with that product,” Mr Streible said.

Mr Trump’s policies are widely seen by economists as fanning inflation and potentially hurting economic growth. Federal Reserve chair Jerome Powell said Wednesday the US central bank was in a “wait-and-see” mode with regard to the potential impact of the new administration’s policies.

Mr Powell and his peers at the Federal Open Market Committee held interest rates steady at their first meeting of the year, adding that they won’t rush to lower rates as they are waiting to see further progress on inflation.

While Mr Trump’s plans are still unclear, he set a deadline of Saturday for tariffs of 25 per cent on Mexico and Canada, and has also said he intends to impose across-the-board levies that are “much bigger” than the 2.5 per cent figure previously suggested by Treasury Secretary Scott Bessent.

Fears of the impact have already jolted the precious metals markets, with US prices of gold and silver surging above their international benchmarks recently and dealers and traders rushing to move the metals into the US before any tariffs are imposed.

Ongoing worries over swelling US debt also make bullion appealing for investors, and many analysts see the rally continuing this year as central banks seek to diversify their reserves and reduce their dependence on the dollar.

with Bloomberg