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Gold miners hit an all-time high, invigorating an otherwise subdued start to the Australian trading week amid a record spike in coronavirus cases.
The S&P/ASX All Ordinaries Gold Index surged 4.2 per cent as the spot price of the precious metal reached record levels. Spot gold soared to $US1,923.20 an ounce this morning, surpassing the 2011 intraday peak of US$1,921.17.
The All Ordinaries index of gold miners has almost doubled in value since March, bouncing from a low of 5105 to a high of 9512 this morning as a string of companies hit records. Perseus Mining rose 7.7 per cent, Saracen Mineral 6.7 per cent and Northern Star 3.7 per cent. Heavyweight Newcrest climbed 3.5 per cent to a nine-month peak.
The broader market was depressed by weak leads from Wall Street and a record daily tally of COVID-19 cases in Victoria. Gains in miners, supermarkets and Telstra offset weakness in energy, bank and insurance stocks. By mid-session, the S&P/ASX 200 was ahead seven points or 0.1 per cent. A positive finish this afternoon would continue a run of daily reversals of direction that extends back to July 8.
Lynas jumped 10.6 per cent on news the US Department of Defense had contracted the miner to process heavy rare earths in Texas. The contract is a step towards the US securing a reliable supply of ores used in manufacturing mobile phones and electric cars.
Mining heavyweights BHP and Rio Tinto advanced 1 per cent and 0.5 per cent, respectively. Other heavyweight movers included supermarket Woolworths, up 0.8 per cent, retail conglomerate Wesfarmers +0.9 per cent, and Telstra +0.8 per cent.
Insurers declined following a weekend of wild weather on the east coast. IAG fell 4.1 per cent and Suncorp 1.4 per cent. QBE recouped early losses to trade unchanged.
CBA was the best of the big four banks with a fall of 0.5 per cent, ANZ shed 0.9 per cent, NAB 0.6 per cent and Westpac 0.7 per cent.
Travel and tourism stocks were pressured by news of the biggest rise in coronavirus cases in Victoria since the start of the pandemic. Premier Daniel Andrews announced there were 532 new cases yesterday and six deaths. Corporate Travel Management sank 4 per cent, Webjet 2.1 per cent, Flight Centre 1.8 per cent and Qantas 0.3 per cent.
US index futures rose ahead of a huge week of corporate earnings and economic data. S&P 500 futures climbed 12 points or 0.4 per cent.
A subdued morning on Asian markets saw China’s Shanghai Composite open flat, Hong Kong’s Hang Seng ahead less than 0.1 per cent and Japan’s Nikkei off 0.5 per cent.
Oil largely overcame a soft start to the week. Brent crude was lately down 14 cents or 0.3 per cent at $US43.20 a barrel after briefly dropping below $US43.
The dollar rallied 0.4 per cent to 71.3 US cents.
What’s hot today and what’s not:
Hot today: Lion One Metals (ASX:LLO) picked the right day to release promising assays from its Fijian alkaline gold project. With gold pushing towards all-time highs, Lion’s share price more than tripled from $1.88 to $6.35 before easing to $4.25, a gain of 126 per cent. Latest drilling at the Tuvatu project on the island of Viti Levu intercepted two high-grade intervals above the main lode system. Technical advisor Dr Quinton Hennigh said the result was “encouraging because it suggests we are now in the right part of the system to find more such mineralisation.”
Not today: Investors were not distracted by the tinsel in a flurry of announcements from children’s nutrition producer Bubs (ASX:BUB) this morning. While the company announced the signing of celebrity model Jennifer Hawkins as a new brand ambassador as well as a new infant vitamins range, shareholders were more concerned by news that revenue decreased five per cent last quarter from the previous quarter. The company attributed the decline to supply woes and a spike in demand the previous quarter as consumers panic stockpiled. The share price retreated 4.4 per cent.
