Gold Under Pressure: Geopolitics, Inflation Fears, and a Sharp Reset in Mining Equities

Ved Shah

Good evening ladies and gentlemen, welcome back to The Australian Gold Mid-Weekly Review!

This week also marks something new for us. We are kicking off a fresh series of video content to complement these written insights, giving you a more dynamic, real-time perspective on markets. More on that shortly.

It has been an eventful and, frankly, volatile start to the week across the precious metals complex. At the time of writing, gold is trading at US$4,870/oz, continuing to reflect heightened investor allocation amid escalating geopolitical tensions involving the United States, Israel, and Iran. Naturally, in times of uncertainty, capital tends to gravitate towards perceived safe-haven assets, and gold has once again found itself at the centre of that narrative.

However, this rally is not without friction.

Market expectations for interest rate cuts have now shifted materially, with projections falling from two cuts this year to just one. This has introduced a counterforce to gold's upward trajectory. Rising fuel prices, a direct consequence of the ongoing conflict and disruption in energy supply, are fuelling inflation concerns, which in turn are limiting the central bank's ability to ease policy. The result? A tug-of-war between safe-haven demand and macroeconomic headwinds.

Silver, as expected, is experiencing amplified volatility. Trading at US$77/oz, the metal is underperforming relative to gold, consistent with its high-beta nature. When uncertainty rises, silver often reacts more aggressively, both on the upside and the downside, and this week has been no exception.

Meanwhile, energy markets have taken centre stage. Oil has surged to US$97/bbl, driven by disruptions in supply flows through the Strait of Hormuz, a critical artery for global oil transportation. This has had a cascading effect across asset classes, most notably compressing the gold-oil ratio. For gold producers, this is particularly significant: rising input costs (energy) combined with a relatively weaker gold-price response translates into margin pressure.

And we are already seeing this play out in equity markets.

The ASX-All Ordinaries Gold Index has declined sharply, down over 5,000 points since Monday, reflecting the market's reassessment of profitability across the sector. Major producers have not been spared. Companies such as Northern Star Resources have seen over A$10 billion in market value erased in just a matter of days.

In times like these, volatility can easily shake conviction. But it is precisely in such environments that disciplined, informed decision-making becomes most critical. Understanding where value truly lies, across gold, silver, and mining equitie, is what separates reactive investing from strategic positioning.

This is exactly what our Managing Director, Brian Chu, addressed in our latest weekly review, breaking down how investors should be thinking about allocation, risk, and opportunity in the current environment.

And that's it for this week's mid-weekly update!

Thank you for tuning in, and as always, we will continue to bring you timely insights every Wednesday to help guide your investment journey. Stay tuned for more video content as part of this new series, and we'll see you again this Sunday for the next episode of The Australian Gold Weekly Review!

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