ASX Rallies on Iran War Hopes: Buy Gold Miners or Avoid Energy Stocks Before Saturday?

ASX Surges on Iran Hopes: What Investors Do Now

Wednesday’s 1.85% rally already feels like a distant memory as the market grapples with a harsh reality check. The ASX surged after US President Donald Trump announced a five-day pause on military strikes against Iranian energy infrastructure, raising hopes the four-week-old Middle East war could be heading towards resolution. But Iran has since formally rejected the US 15-point ceasefire proposal, calling it “maximalist and unreasonable”, and its Foreign Minister stated plainly that no negotiations are taking place. Oil has climbed back above US$100 a barrel as a result. With Trump’s deadline expiring in less than 24 hours, here is what investors need to know right now.

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Gold Miners and Materials Led the Charge

The standout winners on Wednesday were gold miners. The All Ordinaries Gold Index surged more than 8%, with Evolution Mining (ASX: EVN) jumping 8.5% as gold climbed back above US$4,500 per ounce. Gold had been sold off heavily in the days prior as ceasefire signals dampened safe-haven demand. Wednesday’s bounce was a recovery from oversold levels, not a sign that gold’s bull run is resuming without interruption.

We believe EVN and Northern Star Resources (ASX: NST) offer attractive entry points for risk-tolerant investors after two weeks of heavy selling. These are dip-buying opportunities, not a signal to go all-in. Given that Iran has now rejected the ceasefire proposal and tensions remain high, gold’s safe-haven appeal is likely to stay elevated. That supports the case for gold miners at current levels, but investors should expect continued volatility until the conflict has a clearer resolution.

Rio Tinto (ASX: RIO) also had a solid day, gaining around 1.6%. This was partly driven by a separate A$2 billion Australian government pledge to keep the Boyne aluminium smelter operating through 2030. That catalyst is completely independent of the Iran situation, which gives RIO a more stable foundation than most other material stocks right now.

Energy Stocks Missed the Party, and That Should Worry Investors

While the broader market rallied on Wednesday, energy stocks went the other way. Santos (ASX: STO) fell 2.3%, and Woodside (ASX: WDS) dropped 3.2%. This is a red flag worth thinking about carefully.

When ceasefire hopes rise, oil prices fall, and that hurts energy producer margins. That part makes sense. But the fact that energy could not attract buyers even on a broad risk-on day suggests investors are deeply uncertain about what comes next for the sector.

Santos has a separate problem on top of all this. Its Darwin LNG plant is currently shut down due to equipment replacement work on the BW Opal production vessel at the Barossa gas field. Santos confirmed the shutdown is in its final stages of commissioning, but no clear restart date has been given, with the outage expected to last several weeks. This means Santos is unable to benefit from elevated LNG prices at exactly the moment it should be capitalising. In our view, Santos is a hold-and-watch until the plant is back online and the broader situation settles. Adding new money here carries more risk than reward right now.

Why Saturday’s Deadline Changes Everything

Trump’s five-day pause expires tomorrow, Saturday, March 28, less than 24 hours away. Thousands of US Marines are also arriving in the Gulf region at the same time. Iran has formally rejected the US proposal and says it has no intention of negotiating directly with Washington. Oil is back above US$100 a barrel as traders reprice the risk of a prolonged conflict.

Three outcomes are possible by the weekend. A genuine breakthrough would push gold lower and ease pressure on energy costs. An extended pause would keep uncertainty in place without resolving anything. A full breakdown in talks would be bad news for markets across the board.

This rally reflected hope, not certainty. Right now, the picture looks more uncertain than it did on Wednesday morning. Stay selective, lean into gold on weakness, treat energy with caution, and keep some powder dry until Saturday delivers a clearer answer.