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Gold producers advanced after the price of bullion rose by the most since August as Goldman Sachs said prices would reach $US3000 an ounce next year, with its analysts advising investors to “go for gold.” Gold is currently trading at a spot price of $US2616.60 an ounce.

Northern Star Resources shares rose 4 per cent, Evolution Mining climbed 3.4 per cent and Newmont gained 2 per cent.

Meanwhile, IT stocks posted the biggest gains, up 3.1 per cent. Sentiment was boosted by the Nasdaq’s rise overnight as well as local winners such as Technology One, which soared 10.1 per cent after posting a 15 per cent increase in profit to $118 million. Software firm WiseTech rose 2.4 per cent and Xero jumped 3.7 per cent.

Gains in the industrial sector were led by testing and laboratory services provider ALS, which rose 5.7 per cent after posting a 14 per cent increase in half-year sales to $1.46 billion earlier this week.

The laggards

The mining heavyweights limited the ASX’s overall advance, with BHP – the world’s largest miner – 0.1 per cent softer and its iron ore rivals Rio Tinto and Fortescue Metals down 0.4 per cent and 1.1 per cent, respectively. South32 lost 2.7 per cent.

The lowdown

The Australian sharemarket followed the positive returns overnight on Wall Street. The US market recovered after shares had tumbled in recent sessions in a pullback from the “Trump bump” following the presidential election, which saw a rally of banks, smaller US companies and cryptocurrencies likely to benefit from the president-elect’s pro-tariff and anti-regulation agenda.

AMP chief economist Shane Oliver said investors could expect a challenging time under Trump, but greater economic and financial market difficulties might nudge him away from the populist policies that could spell trouble for markets.

”While the starting point for shares is not nearly as positive as it was in 2017, the outlook may not be as bleak as some fear, with global shares likely to provide constrained but still okay returns,” he wrote in a note to clients.

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After the initial Wall Street euphoria, US investors have started bracing for potential downsides of Trump’s agenda. Moderna rose 7.2 per cent overnight but is still down since word came out that Trump wants Robert F. Kennedy Jr, a prominent anti-vaccine activist, to lead the Department of Health and Human Services.

But investors took heart from reports that Trump’s team is considering pairing Kevin Warsh, a former Federal Reserve official, in the Treasury secretary role, with hedge fund manager Scott Bessent as director of the White House’s National Economic Council.

“A more measured and experienced team in financial leadership positions in the US government will be positive for investor confidence,” said Rajeev De Mello, a global portfolio manager at Gama Asset Management, adding that helped equities across Asia and Australia.

The Australian dollar headed for a third day of gains after Reserve Bank minutes showed policymakers thought their current settings were appropriate to try to pull down core inflation that is still “too high.”

On Wall Street, several big name companies will be reporting quarterly results this week, including AI giant Nvidia on Wednesday. The chip company has grown into one of Wall Street’s most influential, with a market value of nearly $US3.5 trillion after becoming the poster child of the rush into artificial intelligence.

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“It highlighted a lot of risks, but the underlying message is they’re worried about the upside risks to inflation,” said Gareth Spence, head of Australian Economics at NAB, in response to minutes from the RBA’s Melbourne Cup Day meeting published on Tuesday.

In the meeting, the RBA board admitted that rates might need to be lifted if it became apparent that economic growth was adding to inflationary pressures.

NAB now expects the RBA to begin cutting rates in May 2025, rather than February.

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