When not proposing changes in the borders of other countries, Trump found time to levy tariffs on Mexico, Canada and China while threatening Europe, before retracting some of his orders, sticking at this stage with the China tariffs, which triggered a predictable Chinese response.

Investors familiar with Trump’s sometimes eccentric comments took the latest developments in their stride. The U.S. and Australian stock markets paused early in the week before regaining lost ground.

By the close in Australia yesterday, the local market was heading back towards its all-time high reached last year of 8532 points as measured by the ASX top 200 index, and 8757 points as measured by the all ordinaries index.

Cautious investors, those concerned about what might happen next as the U.S. is reshaped to suit the views of Trump and his enforcer in chief, Tesla founder Elon Musk, opted for the safety of an asset beyond even their control, gold.

Over the past week, the gold price rose by US$107/oz, taking the gain since Trump’s election last November to US$228/oz (8.5%), but more importantly for local investors his election has sparked a boom in Australian gold mining stocks.

Collectively, Australian gold equities, as measured by the gold index of the ASX, rose by 7% this week, 17% over the past 30 days, and 55% over the last 12 months.

The big two of local gold, Northern Star and Evolution, are up since the start of the year by 18.5% and 23.5% respectively to $18.31 and $5.97.

The outperformance of gold, welcome as it might be, should also be seen as a warning because gold is a counter cyclical asset which tends to fall when the rest of the economy is strong and rise when investors see trouble ahead.

Right now, gold is signalling deep concern about the direction of the global economy as the first shots are fired in a trade war (which no-one can win) and even deeper concern about the whether the radical overhaul of the U.S. Government will deliver the growth promised by Trump and Musk.

If their sacking of tens of thousands of government workers and closure of entire departments such as U.S. Aid works as promised, other countries will follow, but if it doesn’t work and the U.S. gets tied up in endless legal challenges then the rest of the world will turn its back on a failed experiment in hard right politics.

While Trump and Musk try to reinvent the U.S., financial markets will remain split until a clearer picture emerges, ensuring that gold’s remarkable rise is unlikely to stop once it moves past the US$3000/oz mark, clearing the way for a return of forecasts once regarded as absurd, such as the US$4800/oz last month from Switzerland’s Ronnie Stoeferle.

The World Gold Council dodged the risky business of price tipping but confirmed in its report on gold 2024 that overall demand rose by 1% to 4874 tonnes in 2024, led once again by central banks which bought 1044.6 tonnes, the third successive year of government controlled banks buying more than 1000 tonnes.

Apart from gold’s sector leaders mentioned earlier, news flow and market moves from the gold sector this week, included:

  • OzAurum, up 10c (297%) to 14c after announcing fresh drill results from its Mulgabbie North project in WA with a best hit of 20 metres at 3.57 grams a tonne from a depth of 4m, and 10m at 6.59g/y also from 4m.
  • Predictive Discovery added 8.7c (33%) to 35c after the entry of a second suitor for the stock, a consortium of Chinese (Zijin) and European (Lundin) companies. Their arrival on the Predictive share register threatens a bid from Perseus. CG Capital Markets reckon that Predictive’s could rise to 52c.
  • St Barbara reported a solid quarter from its Simberi mine, adding 2.5c on the market to 27c while Macquarie banks sees it rising to 39c.
  • Medallion Metals rose by 1.5c to 13c after announcing a $6.5 million placement to fund design work ahead of an investment decision on its Ravensthorpe gold project in WA, and
  • Strickland Metals slipped 0.5c lower to 7.1c after announcing multiple high-grade intersections which expand the mineralised system, at its Gradina gold project in Serbia, triggering a speculative buy tip from CG Capital Markets which set a price target of 17c.

The China v U.S. tit-for-tat exchange of tariffs failed to cause much of a disturbance in the trade world but did set off a few interesting tremors as commodity buyers started to duck for cover.

Australian coal miners had a good week thanks to China hitting U.S. coal with a 15% tariff. Whitehaven added 8c to $6.25, possibly heading for the Morgans target of $9.50. Coronado rose by 3c to 67c, and Stanmore gained 12c to $2.75 while Morgans said it was on the way to $4.

Trade war talk also started to wash up in the critical metals sector, led by leading local tungsten producer EQ Resources which added 1c (23%) to 3.7c while Group 6 Metals missed the boat having been suspended from trading last year.

The first big mining conference of the year, Cape Town’s Indaba event, drew a big crowd as it always does, providing the South African government with an opportunity to beg for more foreign investment, a job which just got harder with the introduction of land seizure laws which stirred opposition as far away as Washington.

Trump, egged on by South African-born Musk, threatened retaliatory action against South Africa, at the same time he was ordering the closure of the U.S. foreign aid office in a move guaranteed to stir resentment while also forcing U.S. companies to look elsewhere for critical minerals, with Australia top of that list given the new-found enmity with Canada.

Tangled web is one way of looking at the world being weaved by Trump but how it works out is anybody’s guess – and fun to watch.

AusQuest was the pick of the copper stocks for a second week, driven by a fresh set of drill results from its Cangallo porphyry project in Peru with the latest assays including 304m at 0.3% copper and 0.06 parts per million of gold from a depth of 34m.

That thick intersection with reasonable grade was enough to boost AusQuest’s share price by 2.5c (66%) to 6.3c. The stock was stuck around 1c until the middle of last month and has now risen by more than 500% in three weeks.

Sandfire confirmed its status as one of Australia’s best copper stocks despite being internationally focused, rising by 29c this week to $10.06, while Solstice Minerals added 1.5c to 16c after announcing the acquisition of the Nanadie project in WA from Cyprium Metals.

Uranium stocks continued to make headway despite a falling price this week. Boss added 15c to $3.38, potentially piling pressure on persistent short sellers who cleared the 20% mark last week but have now dipped to 18.96%.

Paladin short sellers persisted even as its share price rose this week by 30c to $8.88 with the latest short position reported to be 15.9%, down from a peak of 18.2% just before Christmas.

CG Capital Markets, in a uranium update, said Boss will rise to $4.17, and Paladin will reach $14.90,

Other news and market moves of interest this week included:

  • Deterra Royalties rising by 11c to $4.12 after releasing a solid December quarter report which focused on cash flow from a royalty on some of BHP’s iron ore operations, and the emerging Thacker Pass lithium project in the U.S.
  • Jupiter Mines added 2c to 16c after reporting pre-tax earnings of $26.9 million from its Tshipi manganese mine in South Africa. Macquarie has a price target of 22c.
  • Nickel Industries reported continued strong profit flow from its Indonesian nickel operations but slipped 3c lower to 76c. Bell Potter has a buy tip and price target of $1.39, and
  • Mineral Resources lost 46c to $35.40 despite continued strength in the price of iron ore which rose by US$1.50 a tonne to US$105.30/t on the Singapore Exchange.