ASX200 under pressure amid falling precious metal price

1. ASX Outlook-

The ASX 200 (XJO) is trading at 8,599.7, down -34.8 points (-0.40%). The index has fallen 2.4% over the last four sessions, which puts it at a four-month low. Material sector will be under pressure today due to the falling price of gold and silver.

2. Overnight US Markets:

• S&P 500: down -0.05% (flat)
• Dow Jones: down -0.65%
• NASDAQ: up +0.13%
• Russell 2000 (small caps): up +0.22%

The US often sets the tone for the Australian market. Last night was mixed, so no strong directional push for the ASX today.

3. US Sector Performance:

Winners:

Energy: +1.37%, Information Technology: +0.74%

Losers:

Materials: -1.18% Financials: -0.97% Communication Services: -0.80%.

Australia is heavily weighted towards:

Materials (miners) & Financials (banks)

Both of these were weak in the US, which can drag our market lower today.

4. Commodities:

• Gold: down -2.09% Gold miners may be under pressure today.
• Silver down -3.43%
• Copper: down -0.21% Copper’s small drop means limited effect on base-metal miners.
• WTI Oil: up +2.39% Oil rising is supportive for energy stocks — good news for companies like Woodside or Santos.

5. What to Watch Today (ASX Focus)

The Australian 10-year government bond yield has jumped to 4.47%, up 36 basis points since late October. It’s still within its two-year range, but heading toward 4.50%, which is seen as a bit of a danger zone — historically, markets can become shaky at that level.

Higher bond yields often put pressure on the share market because they:

• Increase borrowing costs
• Make “safer” investments more attractive compared to shares

This partly explains why the ASX has been weak.

6. Broker Move:

J.P. Morgan issued several changes:

Upgrades (Positive moves):

• Genesis Minerals → Overweight, target raised to $8.50 (from $6.20)
• Northern Star → Overweight, target $35.00 (from $23.00)
• Perseus Mining → Overweight, target $6.10 (from $4.40)

Downgrade (Negative move):

• Regis Resources → Neutral (from Overweight), target $6.70 (from $6.50)

Significance of these upgrades- Upgrades often boost share prices because they signal confidence in a company’s future performance — especially important for gold and mining stocks today.

7. Stocks Trading Ex-Dividend:

When a company trades “ex-dividend,” it usually drops slightly as the dividend value is removed.

• L1 Long Short Fund (LSF) – $0.035
• Macquarie Group (MQG) – $2.80
• Plato Income Maximiser (PL8) – $0.006

You only receive the dividend if you bought the shares before today.

8. Earnings Today- Elders (ELD) reports today.

Our take at Kapitales Research:

• The ASX 200 is at a four-month low, but may stabilise soon.
• Rising Aussie bond yields continue to pressure the market.
• US markets were mixed — no clear push for the ASX.
• Commodity weakness (especially gold) could weigh on miners.
• Energy stocks may outperform thanks to stronger oil prices.
• Several gold miners received major upgrades, which is notable given the gold price drop.
• Watch Elders' earnings — could create volatility in the agricultural sector.

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