ASX Shaken by Gold Rout as RBA Hike Bets Get Repriced

Investor’s Summary

• Commodities de-levered hard: gold dumped below US$5,000 briefly and silver cratered up to ~30%, consistent with forced liquidation in a leveraged market.
• Risk snapped back on US growth data: Wall Street led as the Institute for Supply Management manufacturing index jumped to 52.6, signalling the strongest expansion since early 2022 and supporting the reshoring investment-cycle narrative.
• ASX rallied with miners and a rates repricing: gold rebounded and equities caught a bid as the market digested Donald Trump flagging Kevin Warsh for Federal Reserve, but the macro message is higher-for-longer inflation risk and cross-asset volatility returning.

Gold Panic Smacks the ASX, Rate Path Uncertainty Takes Over

The week kicked off on shaky footing. If you hold small caps or higher-risk assets, you probably felt it immediately in your portfolio.

Then we saw a sharp rebound today, which is a timely reminder of the only real certainty in markets. We do not know what comes next, so the rational posture is to be prepared for volatility. That is exactly the tape we are getting.

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In commodities, the unwind was aggressive. Gold sold off hard, briefly pushing below US$5,000 per ounce, and silver saw a violent drawdown, down roughly 30% at its worst point. The silver move in particular had all the hallmarks of a leveraged trade being forced to de-gross. Profit-taking, followed by margin pressure and liquidation, tends to hit silver harder because it is structurally a more volatile, more leveraged market.

Risk sentiment improved alongside the equity rebound, led by Wall Street, after US data signalled a genuine improvement in factory momentum. The Institute for Supply Management manufacturing index jumped to 52.6, the strongest expansion read since early 2022. In macro terms, that is a constructive signal for growth expectations.

That matters because the multi-year push to reshore and rebuild industrial capacity in the US is not just a political slogan. It is an investment cycle, and early evidence of improving manufacturing momentum supports the narrative that some of that capital is beginning to show through in activity data.

Locally, ASX gains were led by miners as gold bounced off its sharpest slump in more than a decade. The catalyst was the news flow around Donald Trump signalling Kevin Warsh as the intended next chair of the Federal Reserve. That headline reduced near-term uncertainty premiums that had been priced into rates and risk assets, and it fed straight into positioning across equities and metals.

Finally, on rates and FX, the read-through is that the market continues to price inflation as sticky. When investors see a higher-for-longer profile, the bias is toward yields staying supported, and that can flow into currency strength as capital chases real return. The key point is not the day-to-day noise. It is that cross-asset volatility is back, and positioning needs to respect that.