Evening Wrap: ASX 200 dips as gold and silver stocks finally pullback. Buy the dip opportunity or beginning of the end?

The S&P/ASX 200 closed 9.7 points lower, down 0.12%.

Nothing goes up in a straight line.

I am of course referring to the massive gains experienced over the last few weeks in ASX listed gold and silver stocks – many of which experienced some degree of pullback today.

Is this a straightforward buy the dip opportunity in a growing sector, or is it the beginning of the end for an overheated trading theme?

I have detailed technical analysis on Gold and Silver in today's ChartWatch to help you answer this exact question!

Click/scroll through for the usual reporting of the major sector and stock-specific moves, the broker responses to them, as well as all of the key upcoming economic data in tonight's Evening Wrap.

Let's dive in!

Markets

ASX 200 Session Chart

The S&P/ASX 200 (XJO) finished points lower at 8,206.3, 0.50% from its session high and 0.27% from its low. In the broader-based S&P/ASX 300 (XKO), advancers lagged decliners by a rather tepid 95 to 175.

The Communication Services (XTJ) (+0.71%) was the best performing sector today, likely in response to strong performances in sector heavyweights Seek (ASX: SEK) (+1.6%), REA Group (ASX: REA) (+1.1%), and Telstra Group (ASX: TLS) (+0.78%). No major news drivers here, and SEK actually dodged a rating downgrade from broker Ord Minnett (see Broker Moves section below for more details).

The XTJ and the Information Technology (XIJ) (-2.9%) sector usually move in lock-step as there such a huge overlap between the business models of both sectors.That was going to be impossible today due to a plunge in XIJ sector heavyweight Wisetech Global (ASX: WTC) (-6.3%) following the announcement founder, CEO (and importantly major shareholder with a trend of selling down his holding) Richard White would be stepping down.

White is to transition into more of a “long-term consulting role, focused on product and business development”, according to the company. The new role will be “Full-Time” on a “10 year term, with an option to extend for a further 5 years by mutual agreement”. Geez, tough to see through that one!

What a mess (sexual assault allegations against White) and what a mess it’s made of what was a perfectly good chart!

Wisetech Global (ASX-WTC) chart - what a mess! (click here for full size image)

Those are the best and worst ASX sectors. In between (not so bad), were Financials (XFJ) (+0.62%), Health Care (XHJ) (+0.36%) and Consumer Staples (XSJ) (+0.28%), and (not so good), were Gold (XGD) (-1.8%) sub-index, and more broadly – the Materials (XMJ) (-0.97%) sector in general.

Much of Gold's move was to do with Newmont Corporation (ASX: NEM) (-6.3%) which dipped following the release of the company's third quarter earnings report. NEM's US listing is currently trading down 6.7% in after market trade. I do note however, that several other recently high flying gold and silver stocks did take a little bit of a beating today – but remember that nothing goes up in a straight line!

The best performing stocks from today’s best performing ASX sectors

The worst performing stocks from today’s worst performing ASX sectors

ChartWatch

Gold Futures (Front month, back-adjusted) COMEX

Nothing goes up in a straight line...

The last time we covered gold was in ChartWatch in the Evening Wrap on 18 October.

In that update, it was a steady procession upwards for the gold price – probing blue sky and without any clear points of supply to contend with.

Wednesday’s supply side candle sets a minor point of supply, and it appears with a credible long black candle (relative to recent candles) and low close.

Today’s candle is showing a very natural response from the demand-side to buy the dip – but it is live and therefore we must discount it!

But, should today’s candle close at or near its high and should it close at least above the balance point (halfway point of the range) of yesterday’s candle, then one would have to assume the short and long terms trends are going to continue on their merry way.

Alternatively, if this candle ends up with the tell-tale sign of lurking excess supply at higher prices – an upward pointing shadow – then we could see a more meaningful pullback develop. In this scenario, I would not be surprised to see 2708.7 tested, and possibly even the dynamic demand of the short term uptrend ribbon (presently 2658-88).

There’s a very good chance (as is customary in such a strong trend-set such as this) for the demand to kick back in at key demand zones. Watch here for white-bodied candles and or downward pointing shadows.

Nothing goes up in a straight line, but I suggest there’s not a great deal of evidence to suggest the supply side is up to much so far!

Silver Futures (Front month, back-adjusted) COMEX

Nothing goes up in a straight line...ditto!

A little bit of a "ditto" with respect to the technical analysis here, so we'll just do the key levels.

I'm watching the old major supply zone of 32.425-33.51 for it to act as an ongoing demand zone. Demand-side candles in or above here would signal the likely continuation of the short and long term trends.

Alternatively, supply-side candles in 32.425-33.51, and or the setting of a lower peak, would indicate the supply-side has more power than can be explained by a "it's just a necessary and expected harmless pullback" excuse.

I'm still very happy to back the trends here, but I note that Wednesday's candle is a credible supply-side signal (size of black body and low session close), and therefore I know I must commit to watching the price action carefully!

Economy

Today

• AUS Flash PMIs October

  • Flash Manufacturing PMI: 46.6 vs 46.7 in September (continued sharp contractdion, worse than expected)

  • Flash Services PMI: 50.6 vs 50.5 in September (continued modest growth, better than expected)

  • Remember: PMI readings above/below 50 indicate growth/contraction in sector

Later this week

Thursday

• 19:00 EUR Various EU countries and European Flash PMIs October

  • EUR Flash Manufacturing PMI: 45.1 forecast vs 45 in September

  • EUR Flash Services PMI: 51.5 forecast vs 51.4 in September

Friday

• 00:45 USA Flash PMIs October

  • Flash Manufacturing PMI: 47.5 forecast vs 47.3 in September

  • Flash Services PMI: 55.0 forecast vs 55.2 in September

• 23:30 USA Core Durable Goods Orders September (-0.1% m/m forecast vs +0.5% m/m in August)

Latest News

Interesting Movers

Trading higher

• +14.3% Chrysos Corporation (C79) - Quarterly Activities - Appendix 4C Cashflow Report and Chrysos Quarterly Presentation Q1 FY25

• +11.6% Adairs (ADH) - Trading Update, rise is consistent with the prevailing short and long term uptrends, was a Chartwatch Daily Scans Uptrends Feature on 15 and 16 October 🔎📈

• +9.9% EML Payments (EML) - Change of Director's Interest Notice (purchase of $518k on market)

• +7.7% Ioneer (INR) - No news since September 2024 - Quarterly Activities Report and September 2024 - Quarterly Cash Flow Report, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up, recent regular in Chartwatch Daily Scans Uptrends lists 🔎📈

• +3.9% Praemium (PPS) - No news since Update - Q1 FY2025 Update and Update - Q1 FY2025 Update Presentation, rise is consistent with prevailing short term uptrend, long term trend is transitioning from down to up, recent regular in Chartwatch Daily Scans Uptrends lists 🔎📈

• +3.6% West African Resources (WAF) - No news since 23 Oct Quarterly Activities Report and Quarterly Cashflow Report, rise is consistent with prevailing short and long term uptrends 🔎📈

• +3.2% Zimplats 10c US (ZIM) - No news, but I do note the platinum ETF ASX: ETPMPT made my Chartwatch Daily Scans Uptrends list today!

• +2.8% Ora Banda Mining (OBM) - No news, rise is consistent with the prevailing short and long term uptrends, not a surprise for one of the most featured ASX gold stocks in Chartwatch Daily Scans Uptrends lists! 🔎📈

• +2.6% Capitol Health (CAJ) - Notice of Second Court Hearing, rise is consistent with the prevailing short and long term uptrends, a regular in Chartwatch Daily Scans Uptrends lists 🔎📈

Trading lower

• -15.9% Lotus Resources (LOT) - Upsized A$130 million Placement to Fund Kayelekera Restart (i.e., cash grab after recent share price appreciation!!! 🤑)

• -9.7% Wildcat Resources (WC8) - No news, lithium price down today in China, looks back in long term downtrend as closed back below long term downtrend ribbon, also has resumed falling peaks and falling troughs and predominantly supply-side candles, needs to hold short term uptrend ribbon ⚠️

• -9.3% Humm Group (HUM) - No news, has been a slippery slope since closed below short term uptrend ribbon

• -7.9% Reece (REH) - Q1FY25 Trading Update and Chair and CEO Addresses to Shareholders and AGM presentation, fall is consistent with prevailing short term downtrend, falling peaks and falling troughs, and predominance of supply-side candles, today closed below long term trend ribbon ⚠️

• -7.6% Cettire (CTT) - Change in substantial holding from MUFG (reduction)

• -7.0% WA1 Resources (WA1) - Ceasing to be a substantial holder, fall is consistent with prevailing short term downtrend, long term trend is transitioning from down to down, was a Chartwatch Daily Scans Downtrends Feature on 11, 18, 21 and 23 October 🔎📈

• -6.3% Wisetech Global (WTC) - Key Business Update (Richard White to step down)

• -6.3% Newmont Corporation (NEM) - Third Quarter 2024 Results Release and Dividend/Distribution

• -5.3% Super Retail Group (SUL) - Trading Update and 2024 AGM Addresses and Presentation

• -4.7% Strike Energy (STX) - Q1 FY25 Quarterly Report & Appendix 5B, fall is consistent with the prevailing short and long term downtrends, a regular in Chartwatch Daily Scans Downtrends lists 🔎📈

Broker Notes

• 29METALS (29M)

  • Retained at neutral at Citi; Price Target: $0.45

  • Retained at underperform at CLSA; Price Target: $0.39 from $0.30

  • Retained at hold at Jefferies; Price Target: $0.45

  • Retained at neutral at Macquarie; Price Target: $0.46 from $0.38

  • Retained at overweight at Morgan Stanley; Price Target: $0.55

  • Retained at buy at Ord Minnett; Price Target: $0.75

  • Retained at sector perform at RBC Capital Markets; Price Target: $0.50 from $0.55

• AIC Mines (A1M)

  • Initiated at buy at Bell Potter; Price Target: $0.60

• Aristocrat Leisure (ALL)

  • Retained at outperform at Macquarie; Price Target: $67.00 from $55.00

• Aurelia Metals (AMI)

  • Retained at outperform at Macquarie; Price Target: $0.24 from $0.25

  • Retained at buy at Ord Minnett; Price Target: $0.27

• Amotiv (AOV)

  • Retained at add at Morgans; Price Target: $12.80 from $13.30

• ARB Corporation (ARB)

  • Retained at hold at Morgans; Price Target: $37.75 from $38.50

• Bapcor (BAP)

  • Retained at hold at Morgans; Price Target: $5.25 from $5.35

• Boss Energy (BOE)

  • Retained at buy at Bell Potter; Price Target: $5.70

  • Retained at equal-weight at Morgan Stanley; Price Target: $3.00

  • Retained at buy at Shaw and Partners; Price Target: $4.20

• Bluescope Steel (BSL)

  • Downgraded to neutral from buy at Citi; Price Target: $23.00

• Brambles (BXB)

  • Retained at neutral at Citi; Price Target: $18.50

  • Retained at outperform at Macquarie; Price Target: $17.85

• Car Group (CAR)

  • Retained at hold at Morgans; Price Target: $36.30 from $35.40

• Commonwealth Bank of Australia (CBA)

  • Retained at underweight at Morgan Stanley; Price Target: $113.50

• Cygnus Metals (CY5)

  • Retained at buy at Shaw and Partners; Price Target: $0.25 from $0.30

• Ebos Group (EBO)

  • Retained at add at Morgans; Price Target: $39.04

• Fletcher Building (FBU)

  • Retained at outperform at CLSA; Price Target: $3.30

  • Retained at neutral at E&P; Price Target: $2.77

  • Retained at neutral at Goldman Sachs; Price Target: $2.75

• Fortescue (FMG)

  • Retained at neutral at Citi; Price Target: $19.40

  • Retained at underperform at Macquarie; Price Target: $14.25

• Fleetpartners Group (FPR)

  • Retained at buy at Citi; Price Target: $4.10

• Harvey Norman (HVN)

  • Retained at buy at Citi; Price Target: $5.50

  • Retained at underweight at Morgan Stanley; Price Target: $4.00 from $3.90

• Iluka Resources (ILU)

  • Retained at outperform at Macquarie; Price Target: $7.10

  • Retained at accumulate at Ord Minnett; Price Target: $7.00 from $7.05

• JB HI-FI (JBH)

  • Retained at buy at Citi; Price Target: $85.00

  • Retained at underweight at Morgan Stanley; Price Target: $67.10 from $60.60

• Karoon Energy (KAR)

  • Retained at buy at Citi; Price Target: $2.20

• Lunnon Metals (LM8)

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

• Lynas Rare Earths (LYC)

  • Retained at outperform at Macquarie; Price Target: $7.50

• MA Financial Group (MAF)

  • Retained at add at Morgans; Price Target: $7.02 from $5.46

  • Retained at buy at Ord Minnett; Price Target: $7.20 from $7.00

• Meteoric Resources (MEI)

  • Retained at outperform at Macquarie; Price Target: $0.36

• Meeka Metals (MEK)

  • Initiated at buy at Morgans; Price Target: $0.19

• Michael Hill International (MHJ)

  • Retained at neutral at Citi; Price Target: $0.57

  • Retained at outperform at Macquarie; Price Target: $0.73

• McMillan Shakespeare (MMS)

  • Retained at buy at Citi; Price Target: $20.05

• Mystate (MYS)

  • Retained at buy at Ord Minnett; Price Target: $4.31

• Newmont Corporation (NEM)

  • Retained at buy at Citi; Price Target: $95.00

  • Retained at outperform at Macquarie; Price Target: $90.00

• Northern Star Resources (NST)

  • Retained at buy at Citi; Price Target: $18.30

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

• Origin Energy (ORG)

  • Retained at outperform at Macquarie; Price Target: $10.50 from $10.43

• Playside Studios (PLY)

  • Retained at buy at Shaw and Partners; Price Target: $0.90 from $1.00

• Perseus Mining (PRU)

  • Retained at buy at Canaccord Genuity; Price Target: $4.00 from $4.15

  • Retained at neutral at Citi; Price Target: $3.10

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

  • Retained at buy at Ord Minnett; Price Target: $3.40 from $3.45

  • Retained at buy at UBS; Price Target: $3.05

• PYC Therapeutics (PYC)

  • Retained at buy at Bell Potter; Price Target: $0.25 from $0.17

• QBE Insurance Group (QBE)

  • Retained at buy at Goldman Sachs; Price Target: $20.00

  • Retained at overweight at Morgan Stanley; Price Target: $19.30

• REA Group (REA)

  • Retained at hold at Morgans; Price Target: $204.00 from $197.00

• Reliance Worldwide Corporation (RWC)

  • Retained at buy at Citi; Price Target: $5.85

• St Barbara (SBM)

  • Downgraded to neutral from outperform at Macquarie; Price Target: $0.49 from $0.33

• Seek (SEK)

  • Retained at add at Morgans; Price Target: $26.80 from $25.00

  • Downgraded to accumulate from buy at Ord Minnett; Price Target: $27.00

• Sims (SGM)

  • Retained at outperform at Macquarie; Price Target: $15.40 from $13.00

• Sonic Healthcare (SHL)

  • Retained at neutral at Macquarie; Price Target: $26.10

  • Retained at lighten at Ord Minnett; Price Target: $23.50

• Smartgroup Corporation (SIQ)

  • Retained at buy at Citi; Price Target: $10.45

• Service Stream (SSM)

  • Retained at buy at Citi; Price Target: $1.70

  • Retained at buy at Ord Minnett; Price Target: $1.67 from $1.64

• Super Retail Group (SUL)

  • Retained at neutral at Macquarie; Price Target: $17.80

  • Retained at underweight at Morgan Stanley; Price Target: $15.75 from $14.50

• Syrah Resources (SYR)

  • Retained at outperform at Macquarie; Price Target: $0.32

• Talga Group (TLG)

  • Retained at outperform at Macquarie; Price Target: $0.60

• Viva Energy Group (VEA)

  • Retained at buy at Ord Minnett; Price Target: $3.60 from $3.70

• West African Resources (WAF)

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

  • Retained at buy at Ord Minnett; Price Target: $2.10 from $2.05

• Wesfarmers (WES)

  • Retained at underweight at Morgan Stanley; Price Target: $60.70 from $55.70

• Worley (WOR)

  • Retained at outperform at Macquarie; Price Target: $17.92

Scans