Unfortunately for the rest of the economy, a strong gold price also signals a slowdown which is also being reflected in the crashing oil price, down 20% to US$73.60 a barrel over the last six months.

Dr Copper, another measure of global economic health, is also showing signs of catching the flu, struggling along at US$4.23 a pound, down 16% since its May high of US$5.08/lb.

While a U.S. rate cut was widely expected, the size of the reduction took some investors by surprise because “jumbo” falls are normally reserved for times of crisis.

This week’s rapid gold-price moves perfectly demonstrated the confused outlook as the global economy shifts from a period of high-cost money to lower cost funds, a change process which will add complexity to investment decisions.

The gold yo-yo is worth a closer look because it is a measure of the uncertainty which always comes with a profound shift in central bank policy, and while Australia is expected to be late to the party, lower rates are on the way, eventually.

Immediately after this week’s widely anticipated rates fall, gold jumped by US$28 an ounce to US$2596/oz but within minutes it started to fall, shedding US$48/oz to US$2548/oz – finally ending its wild ride at US$2560/oz, roughly where it was at the start of the week, and showing signs of rising again.

Rather than deliver the positive boost to markets which some investors expected, the rate reduction had been so well telegraphed that it was baked in.

In the U.S., the S&P 500 slipped 0.1% lower. The Australian market did a bit better but was equally subdued, rising early in the week, falling later, to end up 0.8%.

Behind what looked like a non-event, the rate rise was an important signal that the investment game really has changed and that means asset values will start to adjust to a new era of cheaper money and, eventually, a recovery in consumer demand and industrial production.

The challenge will be judging market shifts in what could be a long period of falling rates with hurdles yet to clear, including the U.S. presidential election, assorted wars, exploding pagers and the start next month of an Australian election cycle with Queensland going to the polls on October 26.

As much as investors might wish it wasn’t so, domestic politics has also become a financial factor with business leaders openly declaring opposition to the federal government led by Anthony Albanese.

Local gold stocks had a mixed week. Sector leaders Northern Star and Evolution underlined the jumbled mood of the market. Northern Star lost 7c to $15.52. Evolution added 9c to $4.36.

Other gold moves in a roller-coaster week included:

  • Metal Hawk, up 4.5c (50%) to 14c thanks to promising news from a gold project near Leinster in WA, and because the stock has the backing of successful explorer Tim Goyder.
  • BPM Minerals, up 3.7c (74%) to 8.7c as interest grows in its gold exploration project close to the Karlawinda mine of Capricorn Metals in WA.
  • Westgold Resources, down 26c to $2.63 despite encouraging production guidance with the price well below the $3.50 price tip from Macquarie Bank.
  • Andean Silver, up 7c to $1.13 after unveiling a successful $25 million capital raising.
  • Genesis Minerals, down 15c to $2.08, even as Bell Potter tipped a price pf $2.55 in an initial research note, and
  • Newmont, the world’s biggest goldminer that now includes Australia’s former champion, down 31c at $78.54, well below the $100 price tip from UBS.

While gold was essentially flatlining in choppy waters, one time commodity sector leader, iron ore, continued to struggle with a price around US$91 a tonne, close to the level needed to force high-cost miners out of the market, according to Commonwealth Bank.

Fortescue, the iron ore leader, shrugged off the gloom with a rise of 50c to $17.56 but Mineral Resources went the other way with a fall of $1.32 to $37.23, despite promising news from a gas project near Perth.

Westpac Bank in a commodities sector note said it expected iron ore to slip to US$85/t thanks to growing port inventories in China, which are at a 29-month high. The bank also reckons oil will keep falling, dropping into the US$60/bbl range.

The mix of falling commodity prices and the start of falling interest rates could be a sign that financial markets are getting closer to a bottom with an upward bounce in the new year.

Morgan Stanley, an investment bank, certainly sees a future like that in a strategy note which upgraded BHP from hold to buy, along with Rio Tinto and Mineral Resources.

“Re-enter the trade” is the headline on the bank’s report which acknowledges that China risks remain, but stocks have corrected, with potential gains to come.

Copper stocks had a mixed week much like gold, with 29Metals adding 3.5c to 40c while Sandfire slipped 10c lower to $8.93.

FireFly Metals continued to attract attention, adding another 10c this week to trade around $1 as interest grows in its Green Bay project in Canada. Aeris also did well with a 2c rise to 19c.

BHP maintained its enthusiasm for copper with a fresh report that forecast a massive increase in demand for the metal from the boom in data centres that account for just 1% of copper consumption today but could consume up to 7% of global copper output by 2050.

Lithium remained in the doghouse with fresh warnings that supply is overpowering demand, particularly from mines in Africa and South America, dragging local stocks down.

UBS threw more fuel on the lithium fire with a research note which forecast a 36% increase in global supply next year, followed by another 22% in 2026. “We’re underweight the sector,” the bank said.

Liontown lost 3c to 67c over the week despite a 2c gain yesterday (Thursday). Pilbara was 6c weaker at $2.87 and Winsome Resources was down 4c at 50c notwithstanding an upbeat report on its Renard project in Canada.

If there was a winner this week it could be found at the small end of the market where antimony stocks continued to run hot thanks to ongoing concern about supply of the metal from China.

Pick of the antimony pack was Octava Minerals which is exploring the Yallalong project 220km from the WA port city of Geraldton, Yallalong is said to be in a geological setting similar to gold and antimony deposits in South Africa and Russia.

Investors like the Octava story, running the stock up by 4.2c (85%) this week to 9.1c.

Other antimony moves included:

  • Siren Gold, up 1.3c to 7.3c as interest grows in its Auld Creek project in New Zealand.
  • Legacy Minerals, up 4.8c to 25c after reporting high grade chip samples from its Drake project which is close to Larvotto’s Hillgrove antimony mine in Queensland.
  • Larvotto went the other way this week, down 2.5c to 38c despite a Blue Ocean Equities buy tip and price target of 80c, and
  • Iltani, up 3c to 25c and Bindi Metals, up 1.9c to 9.9c.

Rare earth stocks were mixed, led up by Northern Minerals which added 0.2c to 2.3c after completing a major fund raising for its Browns Range project in WA, while Lynas slipped 6c lower to $6.88.

Other news and market moves included:

  • Chalice Mining, up 29c to $1.48 after its Gonneville polymetallic project on the outskirts of Perth was classified as being strategically important.
  • Paladin Energy, up 16c to $9.73 despite hitting a Chinese roadblock in its plan to acquire Canada’s Fission Uranium.
  • Western Mines Group, up 1c to 25c after reporting thick nickel and cobalt intersections at its Mulga Tank project in WA.
  • Black Rock Mining, up 0.3c to 5.4c after signing a financing agreement for its Mathenge graphite project in Tanzania, and
  • Encounter Resources, down 4c to 42c despite reporting high grade niobium assays across its tenements in WA’s West Arunta region.