Gold reclaimed its role as the world’s ultimate currency this week rising by a remarkable US$260 an ounce to US$4262/oz, up 5.5% in the virtual blink of an eye, thanks to the latest loss of faith in the value of the U.S. dollar – with an even higher gold price to come.

Citi, a leading U.S. investment bank, has flipped its cautious view of gold, tipping a price of US$4500/oz by Christmas and US$5000/oz early next year.

Gold price tips are rarely more than someone’s best guess but in this case there is real weight to the forecast because it is all about a triple-barreled crisis for the U.S. which started with:

  • The Federal Reserve (the U.S. central bank) hitting the debt panic button.
  • The U.S. domestic political climate taking a disturbing turn, and
  • Capped by a Persian Gulf deal which appears to sideline the U.S.

For investors with an appetite for gold, which crashed by 25% in the first six months of the year, the gold revival produced a perfect finish to this year’s Diggers & Dealers mining forum in Kalgoorlie where gold, naturally, dominated proceedings.

But as delegates were heading home from Kalgoorlie yesterday the real action started on the gold market.

Locally, the ASX gold index rocketed up by 13% over the week as the sharp rise in the metal’s price lifted all boats, even downtrodden sector leader Northern Star rose by $2.73 (14%) to $22.17.

Internationally, the first event to wake the gold market was a curious attempt by the U.S. central bank to support the Japanese yen when the real aim was to avoid increasing the already onerous level of U.S. Government debt.

The second event to rock confidence in the U.S. and its dollar was a shock win in a U.S. primary election by a Democratic Socialist, an upset which could be good news for the final two years of Donald Trump’s presidency and ensure a rolling debt and currency crisis.

The third event, which is yet to be confirmed, is the expected opening of the Strait of Hormuz to the free movement of oil tankers out of the Persian Gulf which, if it happens, will uplift all financial markets, including gold, especially if Iran and Oman have struck their own deal and excluded the U.S. in a powerful rebuke of Trump.

The yen rescue attempt was not initially recognised for what it is, acknowledgement that the U.S. Federal Reserve has run out of ammunition, selling euros (the European currency) to fund a yen buying program, a complex maneuver which avoided issuing more U.S. treasury bonds.

Barry Eichengreen, an economics professor at the University of California, Berkeley, wrote in a Financial Times article yesterday that selling euros was partly a way of “not asking the market to swallow additional Treasuries which would have aggravated an already delicate situation.”

In other words, the whopping US$40 trillion in debt owed by the U.S. Government is compounding doubts about the country’s long-term ability to service its borrowings.

It is also raising the ugly possibility that the U.S. could simply try to “inflate away” its debt problem Zimbabwe-style by printing more paper (fiat) money, further damaging the value of the dollar and boosting the case to own its great rival, gold.

Overall, the Australian stock market had a quiet start this week before heating up as the new gold rush started and profit reporting season focused investor interest on the resources sector.

The net result was a 3.7% rise in the all-ordinaries index. A 7% rise in the broad-based metals and mining index and a 13% rise in the gold index.

Apart from Northern Star’s revival, which can be explained in part by its plans for heavy-duty cost cuts at its mines, especially the Superpit flagship in Kalgoorlie, other gold news and price moves includes:

  • Minerals 260, up 13c (22%) to 71c after unveiling an expanded exploration strategy around its Bullabulling mine in WA.
  • St Barbara, up 11c (23%) to 56c after reporting an accelerated exploration program at its Nova Scotia operations in Canada.
  • iTech Minerals, up 1.3c (40%) to 4.6c after reporting high grade drill results from its Reynolds Range project in the Northern Territory, with a best hit of 36 metres at 5.6 grams of gold per tonne, plus 1.2% antimony.
  • Sun Silver, up 15.5c (16%) to $1.12 after announcing high grade silver beyond the current resource area at its Maverick project in Nevada with an additional boost coming from a 5% uplift in the silver price to US$62.13/oz.
  • Predictive Discovery, up 9c (14%) to 74c after releasing a well-received June quarter report and an updated buy recommendation from CG Capital Markets which has a $1.40 target price on the stock.
  • Capricorn Metals, up $2.20 (17%) to $14.79 with Macquarie tipping a target price of $15.90 and Bell Potter pushing the boat out to a target of $17.80, an increase on the previous forecast of $16.70.
  • Brightstar, up 8.5c (24%) to 44c after reporting a spectacular 305.4m intersection at 1.82g/t of gold from extensional drilling at its Sandstone project in WA, and
  • Catalyst Metals, up $1.13 (21%) to $6.47 but with Bell Potter tipping a target price of $13.25.

Copper came close to outperforming gold with a 4% rise to an all-time high of US$6.73 a pound after Chile’s state-owned copper mining giant Codelco said it has paused the expansion of the big El Teniente underground project after fresh warnings about seismic movement.

Six workers died in a collapse last year in the mine which is the world’s biggest underground copper project.

Local copper stocks rose with the price, led by Sandfire, up $2 (10%) to $21.15. Capstone, up $1.69 (12%) to $15.46 with Morgans tipping a rise to $18, and Aeris, up 3c (10%) to 43c.

Hastings Technology Metals was the top rare earth stock this week with a rise of 5c (18.5%) to 32c as a deal involving its co-owned Yangibana project in WA attracted investor attention with an arm of the U.S. Government said to be interested.

Meteoric joined in the sector wide uplift with a rise of 2.7c (15%) to 21c, perhaps on its way to Macquarie Bank’s target price of 43c. Arafura added 1.3c to 20c and rare earth leader Lynas was up $1.90 to $15.90.

Other news and moves in a week which might have reset the market after a gloomy start to 2026 included:

  • Metals X, up 24c (15.5%) to $1.81 thanks to another upward surge in the price of tin which reached US$56,000 a tonne, just short of its all-time high of US$58,000/t reached earlier this year. Other tin stocks rose with Elementos up 3c to 37c and Stellar up 1c to 37c.
  • EQ Resources rose by 7c (27%) to 33c thanks to interest in its tungsten assets and the plans of its newest investor, iron ore billionaire Andrew Forrest.
  • Australian Vanadium rose by 1.5c to 16c as investors eye its research project with aluminium giant Alcoa into applications for vanadium flow batteries.
  • PLS was the pick of the lithium stocks with a rise of 35c to $4.42, followed by Liontown which added 13c to $1.09. Global Lithium crept 1c higher to 54c, well short of $1.75 target set by Shaw and Partners.
  • NexGen led a firmer uranium sector with a rise of $1.09 to $14.09. Bannerman added 38c to $3.40.
  • Killi Resources rose by 3c to 23c after announcing a maiden drilling program to expand the premium quality iron ore resource at its Lodestone project in WA, and
  • Iron ore leader Fortescue rose by 40c to $18.54, shaking off a negative note from Morgan Stanley which is worried about the iron ore price and Fortescue’s rising costs, telling clients that the stock could slip to $15.55.