The spreading trade war prompted a warning from Jay Powell, chairman of the U.S. central bank, that the global economic growth outlook had dimmed, adding to the appeal of gold, and its sister metal, silver, which thrive on uncertainty.

Tariff attacks on friends and enemies orchestrated by the U.S. President, Donald Trump, further rattled investor confidence, creating genuine boom conditions for Australia’s gold mining and gold exploration industries.

Powell, in comments which might annoy Trump, said tariffs “tend to bring growth down and push inflation up”, but he also held out hope that he might persevere with interest rate reductions. Bank analysts in the U.S. expect two cuts this year.

But the challenge for Powell, who kept U.S. interest rates unchanged this week, has clearly become more complex with stagflation, a time of low growth and high inflation, a clear and present danger, according to Torsten Slok, chief economist of leading U.S. investment company Apollo Global Management.

“Stagflation is a very complex challenge for the Federal Reserve, should it listen to growth, meaning should it cut rates, or should it listen to higher inflation, meaning should it be increasing rates,” Slok told the Financial Times newspaper.

In a week of hectic trading the ASX gold index rocketed up by 9% takings its rise since January to 27% and the rise over the last 12-months to 60%, a rise which means local gold stocks are now outperforming the gold price which is “only” up 40% over the last 12-months.

Small gold producers and explorers outperformed leaders this week, a sign that the gold boom is spreading deeper into the sector as investors hunt for undervalued stocks with interesting moves this week including:

  • Trek Metals, up 1.6c (60%) to 4.3c after reporting visible gold in rock chips from drilling near Halls Creek in the Kimberley region of WA, site of the State’s original gold rush in the 1880s.
  • Many Peaks Minerals, up 11c (38%) to 40c after announcing a $6.22 million private placement to fund an increase in exploration at its Ferke project in Ivory Coast.
  • Greatland Gold, up 1.86 pence (21%) to 10.71p on the London stock exchange after reporting a resource of 3.2 million ounces of gold and 117,000 tonnes of copper at its recently acquired Telfer project in WA.
  • Spartan, up 20c to $1.75 and Ramelius down 1c to $2.19 as Ramelius pushes ahead with a cash and shares merger with Spartan.
  • Medallion Metals, up 3c to 18c after announcing the receipt of multiple proposals of up to $50 million to fund its Ravensthorpe gold project.
  • Olympio Metals, up 1.3c (30%) to 5.7c after reporting the outline of a high-priority exploration target at its Bousquet project in Canada.
  • Gold Road, down 20c to $2.44 after reporting production problems at its Gruyere project in WA, and
  • Leaders Northern Star and Evolution, up 38c (2%) to $18.25 and 22c (3.3%) to $6.89 respectively, modest moves which highlight the way investors are diving deeper into the sector.

Copper stocks performed well as the price of their metal hit an all-time high of US$5.11/lb, up US35c over the week.

Whether the copper price can remain elevated is a question for investors to ponder because it has become a seriously divided market, high in the U.S. as tariffs threaten to limit future imports and lower elsewhere, for now.

Morgan Stanley, an investment bank, said that the U.S. copper price is up 26% since the start of the year whereas the rise on the London Metal Exchange price is half that at 13% – but the prices could move closer together as tariff mania settles.

“In our view, copper fundamentals remain supportive for now, although we keep an eye on positioning and caution that any backtracking on U.S. tariffs could drive an unwind,” Morgan Stanley said.

Wilsons Advisory joined the copper rush with a note which almost said buy the sector with buy tips on four of the stocks analysed and a hold on the fifth, Sandfire, which rose this week by 48c (4.4%) to $11.40 a price 40c higher than Wilsons target of $10.80.

Canadian-based Capstone is Wilsons top copper stock. It rose by 85c (9.7%) this week to $9.59 but Wilsons reckons it’s heading up to $14.50.

The other stocks on the firm’s copper list are MAC Copper, up this week by 4c to $17.23, perhaps on its way to the Wilsons target price of $24.50. Hillgrove, up 0.3c to 3.9c against a target of 9c, and New World Resources, up 0.1 to 2.1c, versus a target of 7c.

Lithium moved back onto the radar screens of investors on news of increased electric vehicle sales in China and a technology breakthrough by that country’s biggest EV maker, BYD, which claims to have developed a battery that only takes five minutes to achieve full charge,

BYD’s share price has risen by 50% since the start of the year, spectacularly outperforming its U.S. rival Tesla which is down 40%.

The return of EVs to the front page of business news boosted interest in Australian lithium miners which rose across the board with moves that included:

  • Pilbara Minerals, up 15c to $1.95, but did reach a midweek high of $2.04.
  • Independence Group, up 39c at $4.31, but reached a midweek high of $4.40.
  • Patriot Battery Metals, up 4c at 32c, just short of its mid-week high of 33c, and
  • Liontown, up 8c at 70c after reaching a mid-week high of 75c but still a company which divides analyst opinion, Citi reckons Liontown is overpriced with a target of 60c. Morgans is a little more optimistic with a target of 66c, while Bell Potter is in a different league at $1.25.

Iron ore, which has been largely dismissed by investment banks as yesterday’s commodity, performed strongly early in the week but faded in late trading with the price slipping from US$108 a tonne to US$99.95/t.

Sector leader Fortescue moved with the price, up initially to $17 before slipping back to $16.11, up 13c over the week.

Mineral Resources did better despite reports of another truck rollover on the Onslow haul road. It added $1.76 to $23.55 thanks to the strong support of some investment banks such as Morgan Stanley and RBC which outweighed the negative sentiment of UBS which published a fresh sell note and reduced price target of $28.60.

Uranium stocks regained some of their glow thanks to the short-term price showing signs of bottoming around US$63 a pound before rising back to US$64.30/lb.

Lotus was the pick of the U-pack, rising by 3.3c to 20c after announcing a new sales contract for material to be produced at its Kayelekera project in Malawi. CG Capital Markets has a price target of 34c on Lotus. Bell Potter has 35c.

Deep Yellow was another winner in the uranium sector with a rise of 13c to $1.12, perhaps on the way to Macquarie Bank’s target of $1.90.

Boss Energy was also in demand, rising by 54c (24%) to $2.74 as interest grows in its portfolio of uranium assets. UBS has a price target of $3.20. Bell Potter has $4.80.

Other news and moves of interest this week included:

  • Almonty Industries, up 70c at $2.40 thanks to growing interest in its tungsten and antimony assets, two of the top war metals.
  • Caspin Resources, up 1.1c at 6.7c after reporting high grade tin assays from drilling at its Bygoo project in NSW with a best hit of 11 metres at 2.3% tin.
  • Nimy Resources, up 1.7c at 6.1c after announcing a gallium research contract with WA’s Curtin University.
  • New Hope Corporation, up 55c at $4.22 thanks to growing support for its coal exports and a comment from Citi that coal prices appear to have bottomed, and
  • Image Resources, up 1c at 9.8c after reporting the delivery of first heavy mineral concentrate from its Atlas project to storage at the WA port of Geraldton.