Commodities: Gold
Gold (+77.5%) and copper (+69.8%) have been the standout performers over the past two years. Gold peaked when panic/speculative buying sent it up +122% in January 2026 before retracing, while copper has surged since mid-2025 as tariff-driven stockpiling compounded strong structural demand from electrification and AI infrastructure. Zinc (+49.5%) and Aluminium (+44.6%) have also delivered strong gains, benefiting from the same investment themes.
Gold and silver both popped over +4% overnight, their best day since February, taking precious metals miners along for the ride Barrick (+7.4%) and Newmont (+6.7%). The catalysts for the move was a soft private payrolls report and easing energy cost’s reducing fears of multiple Fed rate hikes into Christmas – note credit markets are still pricing in at least one hike in the remainder of 2026.
Gold ETF fund flows have been volatile over the past three years with investor demand surging in early 2025 as speculators started to piggy back central bank buying pushing gold to record highs, and driving record ETF inflows, attracting US$35B, more than during COVID. Gold surged above US$5,500 in January of this year as speculators bought the precious metal without thought to risk but 6-months later golds trading ~30% lower and plenty of speculator have undoubtedly been caught.
Gold is struggling under rising inflation concerns as the US-Iran conflict pushed crude oil back toward US$90/barrel keeping US 2-year bond yields firmly above 4%. The inverse correlation between gold and US bond yields is very clear in the chart below and last week’s CPI would normally have added significant support to the precious metal if it hadn’t been for the escalation in hostilities around the Strait.
The QRE ETF has corrected by 15% over the past few weeks from its June high, and we would say it’s now in an optimal accumulation phase for investors who don’t want to run the gauntlet of earnings misses, operational issues, etc. However, with the ETF holding ~15% in energy and utilities stocks, we still think picking individual stocks is a better way to go for the moves that we’re targeting.
We selected EVN for MMs gold exposure as the precious metal corrected sharply back in March primarily wanting its copper exposure (~25%) to offer a degree of insulation to the volatility unfolding in the precious metals space – the move has played out reasonably well through 2026, with the miner outperforming most of the gold sector. However, the picture changed short-term yesterday after the stock fell almost 4% after the flagging that inflation would lift FY27 costs by 4–5% and capital expenditure would increase as development activity ramps up – this might be echoed across other gold producers over time. The obvious move following the EVN release is to consider other low-cost producers:
EVN -3.74%: down today despite delivering strong quarterly & FY26 production numbers, with cost guidance for FY27 the main issue.
Fourth-quarter gold production increased 5.6% quarter-on-quarter to 179,655 ounces, while gold sales rose 8.7% to 177,909 ounces. Importantly, all-in sustaining costs declined 23% to A$1,706/oz, supported by Ernest Henry returning to full production following weather-related disruptions and the expanded Mungari mill completing its ramp-up.
Gold and its respective miners are enduring a year to forget after promising so much in January when the precious metal spiked above US$5,500, and cab drivers were talking about the likes of gold like they did stocks back in the 1980’s – just before the crash! The US-Iran War has been bad news for precious metals, supporting the $US and yields, reducing the appeal of Gold. We believe this negative influence will easy, a gold will ultimately resume its uptrend, but there are no clear signs yet.
