If pushed to pick a winner at a bleak time, it was that old faithful in a time of crisis, gold, which added $US45 an ounce to trade at $US1935/oz, a 2.5% increase which compensated for a 3.4% fall in the overall Australian market as measured by the all-ordinaries index.

What happens next, the question troubling every investor, is a fearful unknown with Russia on the warpath in what looks increasingly like an attempt to rewrite history, pushing the border with Europe back to 1945, and perhaps beyond

And that’s before getting to China’s claim to Taiwan and threats to replicate Russia’s move on Ukraine, especially if Russia is successful.

Gold, which loves a crisis, is rising with the Russian advance into Ukraine while also shrugging off the threat of higher interest rates, with the increase by the world’s reserve currency underpinning a solid week for Australian gold equities, as measured in the index which added 6.5% this week.

Northern Star led the gold sector higher with a rise of 67c to $10.55 with most of that coming yesterday (Thursday). Newcrest was another big gold producer in the black, up 84c to $25.60 while Evolution added 12c to $4.37. St Barbara swam against the tide, losing 8.5c to $1.42 after a poor profit result and the dropping of its dividend.

Other gold moves of interest included Perseus, up 14c to $1.80 after reporting strong December half earnings. Ramelius, up 7.7c to $1.56 (with Morgans seeing $1.91 as the next stop). Regis went the other way with a fall of 6.8c to $1.98 largely because it also is not paying a dividend.

Gold is one of the commodities which should help Australia dodge the worst effects of what’s happening in Europe, but most importantly for investors gold is not alone.

At risk of being too optimistic, but assuming we are seeing an attempt to rewrite history, then it could be that the world (other than China and Russia) will beat a path to Australia’s door, as it did in the 1950s when demand for agricultural products and minerals soared. If Russia is ruling itself out of commodity markets (except for its friend in China). then Australia has the rest of the world to trade with.

A clue to that confidence can be found in the first paragraph of this report – commodities up, because when you analyse Australia, you really do find a world-class quarry and farm, producing an abundance of raw materials at competitive prices, reliably.

Iron ore has dominated exports for the past two decades, but a sea-change can be seen as global steel demand peaks and a stampede develops for members of the CLANC family; copper, lithium, aluminium and cobalt, key elements in that other global event, energy transition.

One company best demonstrates the change underway, Rio Tinto, which this week reported a stellar profit result, bumper dividend and with the promise of more to come – but not necessarily from its prime asset, iron ore.

In the year to December 31, iron ore was once again easily the biggest profit contributor for Rio Tinto generating pre-tax earnings of $US27.5 billion, up 46%.

Impressive as the increased iron ore profit was for Rio Tinto, it was earnings from aluminium which grew faster, up 104% to $US4.4 billion, and copper earnings, which were up 90% at $US4 billion.

While there are limited direct Australian aluminium investments, there are two ways of playing the metal, South32 and Alumina. Both companies are riding the aluminium price, which is trading at an all-time high $US3336 a tonne.

South32 was steady this week at $4.54, a solid result given falls almost everywhere else. Its iron ore heavy parent, BHP, fell by $2.49 (5.25%) to $44.91. Alumina lost 12c to $1.95.

Big name investment advisers like both South32 and Alumina. J.P. Morgan reckons South32 is heading up to $5 (a 20c increase on the bank’s last target price of $4.80) while Barrenjoey, the new star among Australian advisers, sees Alumina rising to $2.10.

Also in the energy space are the commodities which politically-correct investors try to dodge, fossil fuels, led by oil, which cracked the $US100 per barrel ceiling yesterday, while coal traded up to $US238 a tonne, up 55% since the start of ’22 largely because of concern about sanctions of Russian exports.

UBS, an investment bank, lists energy as its “first order of impact” in assessing the Russia/Ukraine situation with coal “heavily leveraged to a Russian embargo” while oil could continue to move higher because Russia is the world’s third biggest oil producer.

Copper, the first of the CLANC family, held its ground this week at $US4.48/lb, which is almost the same as rising when most other assets are falling.

29Metals was the best of the copper stocks, adding 8c to $2.69 after reporting a solid profit result. Morgan Stanley reckons the owner of the Golden Grove mine in WA is heading for $3.15. Citi says its target price is $3.30.

AuKing was the best of the copper explorers, up 1.5c to 19c after reporting an eye-catching 105 metre intersection assaying 1.94% copper and 55g/t of silver from a depth of 46m at its Koongie Park project near Halls Creek in the north of WA.

Peel Mining was another emerging copper producer to move higher with a 2c rise to 22c despite announcing a $23 million capital rising for its South Cobar project in NSW.

Three recent copper stars weakened as the Ukraine uncertainty rattled investor confidence. Sandfire slipped 20c to $7.06. Develop shed 18c to $3.37, and OZ lost $1.54 to $24.48.

Those corrections could be short-lived if the Bank of America is reading the copper outlook correctly. It reckons the overall copper market will return to a significant deficit by 2025 because the pipeline of new mines starts to dry up.

Lithium stocks struggled amid concern that the Ukraine crisis could trigger a recession and a slowdown in demand for electric vehicles. Allkem was 34c weaker at $8.66 while Pilbara Minerals lost 27c to $2.63, partly in reaction to news that the company’s highly-regarded chief executive, Ken Brinsden, will retire later this year.

Macquarie Bank said the loss of Brinsden overshadowed the company’s first half profit but retained a buy on the stock and a price target of $3.50. Citi also set a target price of $3.50, down 20c on an earlier forecast.

Mincor was the pick of the nickel stocks, adding 13c to $1.90, a rise which stood out because Macquarie Bank reckons it was overpriced when trading at $1.84 early in the week and was heading for a slide to $1.70.

Iron ore stocks had a rough week despite a modest ($US1 a tonne) rise in the price to $US138/t, partly because of concern about future steel demand but also because of fresh threats from the Chinese Government that it wants to take control of the iron ore market through a centralised purchasing agency.

Fortescue Metals lost $1.15 to $18.58. Champion Iron was down 40c at $6.20. Mineral Resource dropped $3.72 to $43.92. Fenix was down 1.5c to 22c, and Deterra Royalties fell by 8c to $4.33 but attracted an upgraded target price of $4.60 from Citi.

Other news events and market moves this week included:

  • Carawine Resources, up 5.5c (35%) to 22c after receiving a takeover bid pitched at 21c from Queensland coal baron Chris Wallin. Carawine’s prime asset is the Tropicana North gold project in WA.
  • Red 5 reported fresh high-grade gold assays from its Darlot mine in WA which could lead to an expanded operation. On the market, the stock added 0.5c to 32c.
  • Silver Lake finalised its acquisition of Harte Gold in Canada as well as reporting a solid profit for the December half year, events which help the stock add 5c to $1.88, on its way to Macquarie’s target price of $2.20.
  • Increased prices for zircon and ilmenite helped Iluka Resources lift its 2021 profit by 54% to $652 million but investors fretted about future demand, rubbing 97c off Iluka’s share price which fell to $10.51.
  • Australian Rare Earths fell by 6.5c to 74c after reported the best grades yet from its Koppamurra project in South Australia and plans for a trial pit.
  • Talga lost 6.5c to $1.32 despite reporting the production of Europe’s first battery anode at its Lulea plant in northern Sweden, and
  • Hastings Rare Earths said the net present value of its Yangibana project in WA had risen to $1 billion, though on the market the stock eased back by 1c to 27c.