Interest rates and fear of recession also returned as factors influencing financial markets as well as setting the scene for a fresh clash between U.S. President Donald Trump and the head of the U.S. central bank Jerome Powell.

Trump has been demanding a rate cut but Powell is refusing to budge, repeating his warning yesterday that the risks to the U.S. economy from Trump’s tariff policies are too great.

Other countries seem to be more certain about rate cuts with China trimming its rates while the Bank of England is widely expected to cut by 0.25% to 4.25% as the British economy struggles to grow.

Australia is also expected to join the rate cutters with National Australian Bank tipping a sharp fall which could see official rates drop to as low as 2.6% from the current 4.1% by early next year.

Signs of a global slowdown can be seen in the oil price, which has dropped to a four-year low of US$61 a barrel, down US$20/bbl since the start of the year with the drop exacerbated by big oil producing countries, such as Saudi Arabia, lifting output to prop up their economies.

In Australia, the stock market as measured by the all-ordinaries index, crept up by 0.5%, a small move which reflects the uncertainty associated with the return of a Labor Government which has big promises to keep which will almost certainly require tax increases.

The mining sector outperformed the overall market, with a rise of 1.2% while the gold index, after a brief down period, rose by 7.7%, taking the four-week gain to 18.7% and the 12-month rise to 62.5%.

Boss Energy led a revitalised uranium sector with a rise over the week of 45c (13%) to $3.92 thanks to news of first free cash flow from its Honeymoon project in South Australia and reports of a uranium production shortfall in Kazakhstan.

Other uranium stocks joined in the revival with Paladin up 36c to $6.51. Deep Yellow up 12c to $1.32, and Bannerman up 46c to $2.88.

The uranium price has risen by 8% over the past month to trade this week at US$70.10 a pound.

Gold staged a strong recovery early in the week, reaching a four-week high of US$3430 an ounce on Tuesday, seeming to be on track to breach the US$3500/oz mark again before Powell vetoed an immediate rate cut which saw the price retreat to US$3385/oz.

Central bank buying of gold continues to underpin the market for the metal with Bloomberg reporting that the People’s Bank of China bought another 70,000oz in April, the sixth straight month of gold purchases.

Goldman Sachs in its latest comments on gold expects demand to be driven by investors seeking a safe haven for their capital, repeating an end of year price forecast of US$3700/oz, rising to US$4000/oz by the middle of next year.

Local gold stocks reacted positively to the price bounce before fading, led by Northern Star which this week completed its acquisition of De Grey Mining which will add to its appeal as a takeover target for a global miner.

Northern Star moved back over the $20 mark to peak at $20.08 before sliding back to $19.95, up $1.13 over the week.

Gold sector merger and acquisition (M&A) activity remains intense with the latest deal a complex tie-up between Australian-listed Aurum and Canadian-based Montage Gold with both companies connected to China’s Zhaojin Mining and the Lundin family of Canada.

Aurum, which is raising $35.6 million for its Boundiali project in Ivory Coast, rose by 11c this week to 46c.

Other gold news and share price moves this week included:

  • Minerals 260 added 1.3c to 14c but could motor up to 28c, according to Bell Potter which told clients this week that the company’s Bullabulling project in WA set the foundation for growth.
  • Lunnon Metals, which started life as a nickel explorer, rose by 1c to 23c after announcing a maiden gold resource at its Lady Herial project near Kambalda in WA, but Shaw and Partners reckons the stock is heading for 60c.
  • Greatland Gold, the well-connected London-listed miner which is redeveloping the big Telfer mine in WA, rose to a three-year high of 15-pence before slipping back to 13.65p, up 1p for the week.
  • Rox Resources added 5c to 35c after announcing a $40 million placement to fund accelerated development of the Youanmi project in WA, and
  • Catalyst Metals added 92c to $6.28 after announcing the acquisition of the Old Highway gold project from Sandfire Resources for $32.5 million.

Canada called for Australian copper stocks this week with FireFly Metals and White Cliff Minerals posting sharp gains on highly encouraging exploration news.

FireFly rose by 10c to 88c after reporting excellent assays from the latest drilling at its Green Bay project in Newfoundland, including a hit of 6.8% copper equivalent over 12.4 metres. Shaw and Partners told clients that the stock could rise to $1.90.

White Cliff rose by 1.2c (60%) to 3.2c after reporting a thick and rich drill hit of 2.5% copper over 175m from a shallow depth of 7.6m at its Rae project in Nunavut.

Iron ore continues to surprise investors, easing its way back towards the US$100 per tonne mark with trades reported during the week at U$99.33/t.

Fortescue failed to rise with the iron ore price, slipping 33c lower to $16.05, perhaps because investors are concerned with the overall decline in ore quality being exported by Australia.

Platts, a leading commodity research organisation, noted during the week that Rio Tinto, one of the iron ore sector leaders, had downgraded specifications of its primary product, the Pilbara Blend from 61.6% iron content to 60.8% iron, with higher levels of impurities such as silica and alumina.

Citi said in a research note that it expects iron ore to remain around US$100/t this year with the overall market in small surplus conditions.

Lithium stocks continue to be under price pressure though industry leader Dale Henderson from Pilbara Minerals believes a bottom is not far away.

Henderson told the Macquarie Bank investor conference during the week that the price of spodumene (an ore of lithium) needed to rise from its current level of around US$750 a tonne to more than US$1300/t.

Pilbara rose by 3c during the week to $1.48 but did trade up to $1.56 on Wednesday.

Other news and market moves of interest this week included:

  • Syrah Resources bouncing back with a rise of 6c to 30c after reporting that government forces had cleared protestors from the entry to its Balama graphite project in Mozambique.
  • Dateline Resources rocketed up by 2.6c (188%) to 4c after it reported plans to start a drilling campaign at its Colosseum rare earth project in California. The rise lifted the stock’s market value over the $100 million.
  • Lynas, the Australian rare earth leader, slipped 34c lower to $7.99 after a sharp exchange with Resources Minister Madeleine King over the wisdom of metal stockpiles which King wants and Lynas boss Amanda Lacaze doesn’t.
  • Burgundy Diamonds slipped 0.1c lower to 3.8c as pressure from laboratory grown gems continues to weigh heavily on the mined diamond sector which is facing an added threat in the form of U.S. tariffs.
  • Tivan rose by 1c to 12c after announcing a binding joint venture with Japan’s Sumitomo over the financing, development and operation of the Speewah Valley fluorite project in WA.
  • Kingsland Minerals rose by 0.5c to 12c after reporting the appointment of GR Engineering to lead a scoping study into its Leliyn graphite project in the Northern Territory, and
  • Chalice Mining rose by 3c to $1.11 after announcing additional flowsheet improvements at its Gonneville polymetallic project in WA with the identification of a saleable iron product grading up to 66% iron.