Evening Wrap: ASX 200 closes stronger to cap winning week with a Gold, Gold, Gold performance!

Aussie shares closed out a tricky week on a golden note today with a +5% surge in the ASX Gold Sub-Sector (XGD).

At 8099.9, the benchmark S&P/ASX 200 is now just 48.8 points or 0.6% away from setting a new record high. Not bad considering last month's mini-correction, and this month's global economic growth concerns.

In this evening's Wrap you'll find all of the key moves in the gold sector, as well as across the rest of the ASX, plus details of several important broker updates (including upgrades for BHP, RIO, and MinRes), along with detailed technical analysis of the gold and silver markets.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished 24.2 points higher at 8,099.9, 0.54% from its session high and just 0.30% from its low. In the broader-based S&P/ASX 300 (XKO), advancers beat decliners by 162 to 108.

For the week, the XJO finished up 86.5 points or 1.1% higher, 2.3% from its intraweek low and just 0.5% from its intraweek high.

Naturally, with the gold price tipping a new record high overnight (and carrying on in Asian trade – see today’s ChartWatch section for full technical analysis) the Gold (XGD) (+5.2%) sub-index was the best performing ASX sector today.

We also saw Macquarie reaffirm “Outperform” ratings for several ASX gold stocks including Capricorn Metals (ASX: CMM), Evolution Mining (ASX: EVN), Northern Star Resources (ASX: NST), and Resolute Mining (ASX: RSG) (see Broker Notes section for the full list).

The broader Resources (XJR) (+-%) sector also had a strong day out, as rising base metals prices on Thursday helped drive gains across the sector. Most notable, I suggest were the major iron ore producers, who coincidently also got the nod from Macquarie today. The broker upgraded BHP Group (ASX: BHP), Mineral Resources (ASX: MIN), and Rio Tinto (ASX: RIO) to “Outperform” from “Neutral”.

The strongest ASX Gold and Resources stocks today

Today’s moves, as well as the lithium spike earlier in the week, helped The XJR gained a tidy 4.3% for the last five trading sessions. Sounds like a big win, but the chart below shows it only recouped about two-thirds of its prior week’s losses. It also sits uncomfortably below the long term trend ribbon – it’s worst performance relative to that ribbon since the COVID-19 crash in 2020.

S&P/ASX 200 Resources Index weekly chart

Also doing well today was the Real Estate Investment Trusts (XPJ) (+1.1%) sector (continued strength of interest rate sensitives amidst falling market yields), and Energy (XEJ) (+0.84%) sector (continued rebound in the crude oil price overnight).

Doing it tough today was the “Not-Resources” sectors (i.e., due to the one or the other approach by Aussie fund managers we discussed in yesterday’s Evening Wrap) of Financials (XFJ) (-0.61%), Communication Services (XTJ) (-0.56%), and Information Technology (XIJ) (-0.49%). Only modest pullbacks in each, and each is still sporting solid short and long term uptrends on their respective charts.

ChartWatch

Gold Futures (Front month, back-adjusted) COMEX

New highs are gold for trend followers!

The last time we covered gold was in ChartWatch in the Evening Wrap on 5 September.

In that update, I noted that “there’s nothing just yet to suggest the prevailing short- and long-term uptrends cannot continue” and therefore “I am very much leaning to staying the course here”.

I could just go ditto and end today’s analysis there. That’s how you know you’ve got a good trend in place – from one week to the next – there’s little change in how excess demand is manifesting itself in price (i.e., via candles, price action, trends, interaction with points of demand/supply).

When it comes to trend following, ditto is a good thing.

I will note some stuff that is different since our last update:

Gold has closed at a new high (nothing wreaks more of excess-demand than new all-time highs…they are a trend follower’s bread and butter – when everyone else is fretting “ooh that’s too high now, I can’t possibly buy that…” the trend follower is forging in knowing they have the weight of unanimous demand-side control behind them!)

Demand has moved to 2570.4, but really, there’s now a foundation zone of demand in the old consolidation band between 2502.7 more recently, but down to 2351.9.

Points of supply? There aren’t any, but I like to keep an eye on round numbers in blue sky situations, so 2600 is an obvious point to watch

It’s all textbook stuff here, so once again, I’ll just be staying the course.

Silver Futures (Front month, back-adjusted) COMEX

Long term uptrend ribbon doing its job again...

The last time we covered silver was in ChartWatch in the Evening Wrap on 26 August.

In that update, we were noting how silver had tested and held the dynamic demand at the long term uptrend ribbon. Well, like gold, ditto. It did it again.

But that’s not necessarily a good thing, because it does imply another dip, albeit and then hold, of the long term uptrend ribbon. But I suggest that this time the rebound from the ribbon is better than the first time, and therefore, silver is setting up better for a new push towards the Feb 2021 high.

It will need to close above the now-key point of supply at 30.65 first, and then it could be a tough slog to crack the very well defined 32.44-33.51 supply zone.

Thursday’s long white demand-side candle with high close is an emphatic signal that the demand-side has retaken control of the price, however, and it is encouraging that major point of demand at 28.79 is higher than the major point of demand at 26.93.

I am happy to back the long term uptrend here, but silver doesn’t look anywhere near as good as gold. It’s kind of taking silver to gold’s gold if you get what I mean. Hey, it’s Friday, give me a break!

Economy

Today

• There weren't any major data releases in our time zone today

Later this week

Saturday

• 00:00 USA Prelim UoM Consumer Sentiment August (68.4 forecast vs 67.9 July)

Latest News

Interesting Movers

Trading higher

• +10.2% Perseus Mining (PRU) - No news, strong ASX gold sector today on new record high in gold price, Macquarie reaffirmed outperform for several gold stocks, rise is consistent with prevailing long term uptrend 🔎📈

• +10.1% West African Resources (WAF) - Change of Director's Interest Notice (on market purchase), ditto ASX gold sector, rise is consistent with prevailing long term uptrend 🔎📈

• +9.8% Capricorn Metals (CMM) - No news, ditto ASX gold sector, rise is consistent with prevailing short and long term uptrends 🔎📈

• +9.1% Chalice Mining (CHN) - No news, strong rally this week on battery metals recovery

• +8.2% Red 5 (RED) - No news, ditto ASX gold sector

• +8.1% Strike Energy (STX) - No news, generally stronger ASX energy sector on second day of bounce in energy commodities

• +7.7% Beacon Lighting Group (BLX) - No news, sells gold pendant lights? Rise is consistent with prevailing short and long term uptrends 🔎📈

• +7.6% Adriatic Metals (ADT) - No news, silver is also rallying, see today's ChartWatch for detailed technical analysis

• +7.4% De Grey Mining (DEG) - No news, ditto ASX gold sector

• +6.9% Evolution Mining (EVN) - No news, ditto ASX gold sector, rise is consistent with prevailing short and long term uptrends 🔎📈

• +6.8% Firefly Metals (FFM) - Revised Precious Metals Summit Beaver Creek Presentation, ditto ASX gold sector, copper was also up Thursday, rise is consistent with prevailing long term uptrend 🔎📈

• +6.7% Regis Resources (RRL) - No news, ditto ASX gold sector

• +6.5% Ramelius Resources (RMS) - No news, ditto ASX gold sector, rise is consistent with prevailing short and long term uptrends 🔎📈

• +6.3% Regis Healthcare (REG) - No news, provides services to Australians in their "golden" years? Rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.8% Gold Road Resources (GOR) - Gold!

• +5.8% Sigma Healthcare (SIG) - No news, couldn't come up with an appropriate gold pun, sorry! Rise is consistent with prevailing short and long term uptrends 🔎📈

• +5.8% Resolute Mining (RSG) - Gold!

• +5.7% Emerald Resources (EMR) - Gold!

• +5.6% 29METALS (29M) - Copper/gold!

• +5.5% Bellevue Gold (BGL) - Gold!

• +5.0% Fortescue (FMG) - Iron Ore!

Trading lower

• -9.0% WA1 Resources (WA1) - 2024 Annual Report, fall is consistent with prevailing short term downtrend, at risk of closing below long term uptrend ribbon 🔎📉

• -7.9% Omni Bridgeway (OBL) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -7.1% Renascor Resources (RNU) - No news, fall is consistent with prevailing short and long term downtrends 🔎📉

• -6.3% Liontown Resources (LTR) - No news, modest pullback in several lithium names after strong rallies this week, still, fall is consistent with prevailing short and long term downtrends 🔎📉

• -6.1% Iperionx (IPX) - No news.

• -5.7% Arcadium Lithium (LTM) - Ditto ASX lithium pullback

• -5.7% Jupiter Mines (JMS) - Appointment of Sally Langer to the Jupiter Board, fall is consistent with prevailing short and long term downtrends 🔎📉

• -5.5% Silex Systems (SLX) - No news, ASX uranium sector also pulling back today after strong run this week, fall is consistent with prevailing short and long term downtrends 🔎📉

• -5.0% Bannerman Energy (BMN) - Ditto ASX uranium pullback, fall is consistent with prevailing short and long term downtrends 🔎📉

Broker Notes

• Amaero International (3DA)

  • Retained at buy at Shaw and Partners; Price Target: $0.60

• Audinate Group (AD8)

  • Retained at outperform at Macquarie; Price Target: $14.60

• Bellevue Gold (BGL)

  • Retained at outperform at Macquarie; Price Target: $1.90

• BHP Group (BHP)

  • Upgraded to outperform from neutral at Macquarie; Price Target: $44.00 from $43.00

• Brickworks (BKW)

  • Retained at buy at Citi; Price Target: $37.50

  • Retained at hold at Ord Minnett; Price Target: $27.00 from $29.00

  • Retained at neutral at UBS; Price Target: $28.00 from $30.00

• Breville Group (BRG)

  • Retained at outperform at Macquarie; Price Target: $35.10

• Brambles (BXB)

  • Retained at overweight at Jarden; Price Target: $17.90

  • Retained at hold at Jefferies; Price Target: $16.48

  • Retained at outperform at RBC Capital Markets; Price Target: $19.25

• Commonwealth Bank of Australia (CBA)

  • Retained at sell at Goldman Sachs; Price Target: $100.35 from $94.80

• Capricorn Metals (CMM)

  • Retained at outperform at Macquarie; Price Target: $7.20

• Carnarvon Energy (CVN)

  • Upgraded to overweight from neutral at JP Morgan; Price Target: $0.21 from $0.19

• De Grey Mining (DEG)

  • Retained at outperform at Macquarie; Price Target: $2.10

• Dreadnought Resources (DRE)

  • Downgraded to hold from buy at Bell Potter; Price Target: $0.02 from $0.15

• Data#3 (DTL)

  • Retained at overweight at Morgan Stanley; Price Target: $10.00

• Evolution Mining (EVN)

  • Retained at outperform at Macquarie; Price Target: $4.50

• Genesis Minerals (GMD)

  • Retained at outperform at Macquarie; Price Target: $2.70

• Genusplus Group (GNP)

  • Retained at buy at Bell Potter; Price Target: $2.70

• Gold Road Resources (GOR)

  • Retained at outperform at Macquarie; Price Target: $2.00

• Green Technology Metals (GT1)

  • Retained at buy at Bell Potter; Price Target: $0.19

• Insurance Australia Group (IAG)

  • Retained at equal-weight at Morgan Stanley; Price Target: $7.10 from $6.85

• IDP Education (IEL)

  • Retained at overweight at Morgan Stanley; Price Target: $21.50 from $19.50

• IGO (IGO)

  • Upgraded to neutral from underperform at Bank of America; Price Target: $5.60

  • Retained at neutral at Citi; Price Target: $5.90

• Imdex (IMD)

  • Retained at sell at Citi; Price Target: $2.00

• IPH (IPH)

  • Retained at outperform at Macquarie; Price Target: $7.31

• Mineral Resources (MIN)

  • Retained at buy at Bell Potter; Price Target: $66.00

  • Retained at positive at E&P; Price Target: $67.00

  • Upgraded to outperform from neutral at Macquarie; Price Target: $48.00

  • Retained at outperform at RBC Capital Markets; Price Target: $66.00

• Metro Mining (MMI)

  • Retained at buy at Shaw and Partners; Price Target: $0.14

• Megaport (MP1)

  • Retained at buy at Goldman Sachs; Price Target: $12.00

  • Retained at outperform at Macquarie; Price Target: $13.60

• Metcash (MTS)

  • Retained at neutral at Citi; Price Target: $4.00

• Newmont Corporation (NEM)

  • Retained at accumulate at Ord Minnett; Price Target: $80.00

• National Storage Reit (NSR)

  • Retained at buy at Citi; Price Target: $2.70

• Northern Star Resources (NST)

  • Retained at outperform at Macquarie; Price Target: $19.00

• Nextdc (NXT)

  • Retained at outperform at Macquarie; Price Target: $21.20

• Perseus Mining (PRU)

  • Retained at outperform at Macquarie; Price Target: $3.40

• QBE Insurance Group (QBE)

  • Retained at neutral at Macquarie; Price Target: $16.90

• REA Group (REA)

  • Retained at buy at Citi; Price Target: $230.00

• Red 5 (RED)

  • Retained at outperform at Macquarie; Price Target: $0.50

• Regis Healthcare (REG)

  • Retained at overweight at Jarden; Price Target: $4.46

  • Upgraded to outperform from sector perform at RBC Capital Markets; Price Target: $7.50 from $3.50

• Rio Tinto (RIO)

  • Upgraded to outperform from neutral at Macquarie; Price Target: $120.00 from $118.00

• Ramelius Resources (RMS)

  • Retained at neutral at Macquarie; Price Target: $2.30

• Regis Resources (RRL)

  • Retained at outperform at Macquarie; Price Target: $2.90

• Resolute Mining (RSG)

  • Retained at outperform at Macquarie; Price Target: $0.82

• South32 (S32)

  • Retained at outperform at Macquarie; Price Target: $4.15 from $4.25

• St Barbara (SBM)

  • Retained at outperform at Macquarie; Price Target: $0.33

• Steadfast Group (SDF)

  • Retained at outperform at Macquarie; Price Target: $6.80

• Seek (SEK)

  • Retained at buy at Ord Minnett; Price Target: $27.00

• Suncorp Group (SUN)

  • Retained at overweight at Morgan Stanley; Price Target: $20.50 from $19.95

• Tabcorp (TAH)

  • Retained at neutral at Macquarie; Price Target: $0.50

• Telstra Group (TLS)

  • Retained at overweight at Jarden; Price Target: $4.20

• Technology One (TNE)

  • Retained at outperform at Macquarie; Price Target: $22.20

  • Retained at buy at UBS; Price Target: $26.20 from $22.00

• TPG Telecom (TPG)

  • Retained at overweight at Jarden; Price Target: $5.25

• West African Resources (WAF)

  • Retained at outperform at Macquarie; Price Target: $2.00

• Westgold Resources (WGX)

  • Retained at outperform at Macquarie; Price Target: $3.70

• Wisetech Global (WTC)

  • Retained at neutral at Macquarie; Price Target: $100.00

• Xero (XRO)

  • Retained at outperform at Macquarie; Price Target: $184.40

Scans