Resources hit by double-barreled blast of surging oil and interest rates

Copper was leading the way up, rising to an all-time high of US$6.90 a pound before a fall back to US$6.69/lb drove buyers to the sidelines. Gold did much the same, rising then falling.

Fiery speeches from the U.S. and Iran at a meeting of the United Nations in New York were a reminder that there is unfinished business in the Persian Gulf, the world’s most important source of oil and gas.

It was a US$6 per barrel rise in the price of Brent quality crude oil which did the most damage, lifting the price back above US$100/bbl, as well as sparking warnings of a possible increase to a record US$150/bbl unless the shooting stops.

The oil surge was followed by a move back above 5% in the yield of the U.S. 10-year bond rate which hit 5.12%, a level regarded as a precursor to a future economic downturn as governments and households are forced to spend more servicing their debts.

Australia followed the latest rise in the yield on U.S. debt with the local 10-year bond trading up to 5.39%, prompting Westpac Bank to issue a sobering warning that Australian governments were “learning the laws of compound interest”, forced to allocate billions of dollars more in interest payments.

Gold was sideswiped by the oil/rates upswing, shedding US$110 an ounce late in the week to trade around US$4285/oz.

Good news, a scarce commodity, could be found in patches, including continued heavy Chinese gold buying which is putting a floor under the metal.

In the eight months to the end of August, Chinese investors and the country’s central bank spent close to US$160 billion buying 1000 tonnes of gold, a sharp increase on the US$96.5 billion outlaid in all of 2025 to acquire 886 tonnes of the metal.

Another positive event drowned out by the double barreled blast of rising oil and rates was a strong flow of fresh capital into the small and mid-tier mining sectors which had lost support after the May budget tax changes.

A feature of the inflows was their size, not the usual $3 million to $5 million top ups, but hefty lumps measured in the $50 million (Tungsten Mining) to $70 million range (Silver Mines) with the incoming cash a measure of investor confidence in the outlook for metals.

Unico Silver was another of the double-digit fund raisers ($60 million). Wildcat hauled in $60 million for its Tabba Tabba lithium project, and Aurum attracted $52.5 million for its Boundiali gold project in Ivory Coast.

Other gold moves and news this week included:

• Ramelius, up 37c to $3.98 after management promoted the “cash machine” nature of the company’s Mt Magnet operations in WA. The rise caught RBC on the hop with its neutral research note tipping a future price of $3.70 whereas Macquarie was almost spot on with a price forecast of $4.

• Waratah Minerals had its best week of the past 12-months, rising by 22c (35%) 87c after reporting its highest assays from the Spur gold discovery in NSW. Results included 46 metres of 7.27 grams a tonne from a depth of 541m, with high grade zones up to 15.62g/t over 19m.

• Ballard Mining rose by 11c (16%) to 80c after reporting a 56% increase in the gold resource to 1.84 million ounce at its Mt Ida project in WA.

• Tesoro Gold added a modest 1.5c to 90c after reporting a maiden 1.3m/oz reserve at its Ternera project in Chile. Morgans reckons the stock is bound for a much higher price, setting a target of $2.64.

• Catalyst Metals fell by a hefty $1.04 to $5.81 as investors digested the damage of higher than expected operating costs. The stock is down 40% on its high of $9.64 reached in the January gold boom, and

• Northern Star, rose by 29c to $22.24 as it continue to build support thanks to its boardroom dramas being largely played out.

Copper, as mentioned earlier, ran hot until mid-Wednesday, hitting its all-time high of US$6.90 a pound thanks to a combination of strong Chinese buying and speculation of a U.S. tariff on imports, before easing to US$6.69/lb.

Perhaps more important than the price of copper is evidence of a deepening in the Australian copper sector as more companies join the game which has been dominated by a handful of producers for decades, principally BHP which added 34c this week to trade at $60.95.

High profile analyst Charlie Aitken from Regal Partners stirred the copper pot during the week with a prediction that BHP shares are heading to a peak price of $100, up 64% on last sales just as Commonwealth Bank sinks to $100, down 33% on last sales of $149.60 – a perfect example of buy miners and sell banks.

But it was at the smaller end of the copper sector that a more interesting trend appears to be developing as deal flow accelerates, discovery news builds, and promoters dust off new copper floats.

AIC Mines, up 7c this week to 88c, was the deal maker of the week with a plan to buy the Mt Cuthbert project near Cloncurry in the home of Australian copper, north-west Queensland.

Anax and White Cliff led discovery news with Anax reporting high grade copper during infill drilling at its Mons Cupri project in WA, while White Cliff reported high grade copper from drilling at its Rae project in Canada. Anax rose by 0.2c to 3.8c. White Cliff added 0.1c to 2.7c. Last week’s copper star Kaoko slipped 33c lower to $2.17.

Jacaranda Natural Resources is the new copper float making its way through the ASX listing process, seeking up to $10 million at 20c a share to fund work on a mix of Australian and Botswanan copper assets.

Other price moves by copper stocks this week included Sandfire, up 86c to $22.51. FireFly down 3c to $1.72 and Capstone, up 47c at $14.88.

Lithium news was dominated by Global accepting a $333 million takeover offer from Dubai-based Titan which is paying $1.15 cash per share for the stock, a price 50% higher than last Global sales.

Most other lithium stocks eased, led by Vulcan which fell 19c to $2.07 and PLS, down 9c to $4.01.

Uranium stocks performed well in a rollercoaster week, led by Boss which added 3c to $1.62 but the stock did receive a buy tip from Macquarie, including a price target of $2.

Other U-moves, a mix of rises and falls, included Paladin, down 9c to $9.85. NexGen, up 2c to $13.57, and Deep Yellow, down 2c to $1.30 but recipient of a buy tip from Morgans and price target of $1.95.

Killi was the best of the iron ore sector with a modest rise of 1c to 32c after reporting the intersection of coarse magnetite 600m south of the resource boundary at its Lodestone project in WA.