ASX 200 Recovers on Gold Strength

• ASX 200: Rebounded after early losses; closed with a hammer pattern; AU$9,000 remains key resistance.
• Fortescue (FMG): -0.26% Wednesday; range-bound between AU$18–20; Morgan Stanley raises target to AU$21.20.
• Gold Corporation (PMGOLD): +2.14%; breaks above AU$60; rally extends with strong gold prices.
• Newmont (NEM): -0.07%; +15.48% month, +71.21% YoY; supported by gold above $4,000/oz.

The ASX 200 initially fell during Wednesday’s session but appeared to recover later in the day, with buyers stepping in. It now looks set to close with a hammer candlestick pattern, signalling potential strength.

The AU$9,000 level above current trading has been a persistent barrier for several months. This resistance makes sense, as global indices remain broadly bullish, yet concerns linger about the global economy and demand outlook.

Demand directly affects commodity prices, which in turn have a strong influence on Australia’s economic performance. For that reason, keeping a close watch on commodities remains essential.

Gold prices continue to climb sharply, and that has major implications for key sectors of the Australian economy. Most hard commodities are also under upward pressure, suggesting this trend could gradually spread across other areas of economic activity.

Fortesque Limited (FMG)

Fortescue fell 0.26% during Wednesday’s trading session as the materials giant continued to move sideways. Despite gaining 1.75% over the past month, the stock remains down 0.36% year-to-date.

The share price has been fluctuating between AU$18 and AU$20, showing signs of consolidation. It’s also worth noting that Fortescue offers a dividend of AU$0.60 and is widely held by large institutional funds.

Although the stock recorded a slight loss on Wednesday, Morgan Stanley raised its price target for Fortescue by 7% to AU$21.20 per share.

Gold Corporation (PMGOLD)

Gold Corporation continues to perform strongly, supported by the ongoing surge in gold prices. PMGOLD gained another 2.14% during the trading session, extending its recent rally.

The move may seem stretched, but given the strength in the underlying commodity, the rise is understandable. With PMGOLD now trading above AU$60, the market appears to have entered a new upward phase.

However, PMGOLD tends to mirror movements in the gold market closely. Any pullback in gold prices is therefore likely to be reflected in PMGOLD as well.

Newmont Corporation (NEM)

Newmont Corporation slipped 0.07% during Wednesday’s trading session. However, with a 15.48% gain over the past month and a 71.21% rise over the past year, the small decline is not a major concern.

Like other mining companies, Newmont continues to benefit from the strength in gold and other commodity markets. The current rally has lifted sentiment across the sector.

While the market appears somewhat extended, momentum remains strong. With gold prices now above the $4,000 per ounce level, companies such as Newmont are likely to keep seeing positive effects from elevated gold prices.

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