Australian mining shares had their strongest week in a month while the metal they are most associated with kept falling. The materials sector rose 4.06 percent in the week to Friday October 30 and the ASX 200 rose 1.28 percent to 8,908.1 points, even though materials gave back 0.87 percent on Friday alone and gold broke below 4,000 dollars an ounce that day, its lowest since July. Consumer staples fell 5.13 percent in the same week as September inflation, up 0.8 percent in the month and 4.3 percent on the year, pushed markets to price roughly an 80 percent chance of a Reserve Bank of Australia rate rise on Tuesday.
The leaders were copper and diversified names. Sandfire Resources rose 9.16 percent to 20.14 dollars, South32 rose 5.08 percent to 4.34 dollars, BHP rose 4.56 percent to 57.56 dollars, Mineral Resources rose 4.08 percent to 44.09 dollars, and Rio Tinto rose 0.71 percent to 147.31 dollars, while Fortescue was flat at 14.27 dollars. Traders treat the large Australian miners as a local proxy for global artificial intelligence spending, because data centres and their power infrastructure consume copper and aluminium at several times the metal intensity of the buildings themselves, so the sector recovered with United States technology shares early in the week after falling with them the week before.
Gold producers diverged from bullion. Northern Star Resources rose 4.59 percent to 25.27 dollars, Evolution Mining rose 3.98 percent to 11.76 dollars, and Newmont’s Australian listing rose 0.7 percent to 156.12 dollars, all while gold fell. In Australian dollar terms the metal remains high and producer costs are relatively fixed in the short run, so margins per ounce stay healthy even as the United States dollar price slides. Lithium was the soft spot, with Liontown Resources down 3.13 percent to 62 cents on sluggish prices. The week ahead turns on Tuesday’s central bank decision, United States technology shares, and whether gold holds around 4,000 dollars.