Gold has once again seized the spotlight, with prices climbing sharply after a period of weakness. In a recent interview with AusBiz, our founder Brian Chu discussed the key drivers behind this move and what it could mean for investors in the months ahead.
For much of August, gold drifted lower, even slipping beneath US$3,300 an ounce. Yet sentiment shifted quickly as inflation data gave way to renewed expectations that the US Federal Reserve may cut interest rates as early as this month. At the same time, political developments in Washington including the potential removal of Governor Lisa Cook raised the prospect of a more Trump-aligned Federal Open Market Committee. Together, these forces helped propel gold back above US$3,480 an ounce, while silver surged through the US$40 mark, a level Brian had been closely watching.
This resurgence has spilled into equities, with the ASX Gold Index staging its strongest rally in years and major producers notching double-digit daily gains. However, Brian cautioned that while large-cap producers have delivered impressive results, market enthusiasm risks pushing their valuations into overheated territory. His strategy, instead, remains focused on the mid-tier producers and select developers, where production growth and stronger upside potential make the risk-reward profile more attractive.
Explorers, too, are beginning to find their moment. Roughly a third of ASX-listed juniors are now gaining traction, with companies such as Barton Gold, Southern Cross Gold, and Medallion Metals delivering standout performances. Brian stressed that careful stock selection remains critical, as not all explorers will participate in the rally but those with quality assets are well placed to follow the lead of established producers.
As Brian explained, the “party” in large-cap gold stocks may already be in full swing, but in the smaller end of town, it is only just getting started. For investors willing to look beyond the obvious names, the opportunity set could be significant.
Watch the full interview with AusBiz here:
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