<div id="readability-page-1"><div><div><div>Key points:<ul><li>A hawkish Fed repricing, firmer US dollar, US-Iran tensions and softening Chinese demand have hit commodity prices, dragging the average large cap miner down roughly 10% this week.</li><li>Gold has erased its stellar start to the year. After surging almost 30% in January, it now sits down around 5% year-to-date following a 9.2% six-day slide.</li><li>Structural tailwinds remain intact. AI-driven capex, rising defence spending and a lack of new supply all support demand, though volatility is extreme for now.</li></ul></div>Talk about a U-turn. The S&amp;P/ASX 200 Materials Index went from all-time highs on 3 June, to a five-day skid that wiped out as much as 11%, with more pronounced declines for gold, uranium and lithium miners.Commodity prices (ex-energy) continued to sell off overnight, with most recording sharp declines over the last six sessions. A high-flying commodity like gold, which was up almost 30% in the first four weeks of the year, is now down around 5% year-to-date.<div><table><thead><tr><th colspan="1">Commodity</th><th colspan="1">Chg %</th><th colspan="1">6 Days %</th><th colspan="1">Close (US$)</th></tr></thead><tbody><tr><td>Gold</td><td>-4.45%</td><td>-9.20%</td><td>$4,071</td></tr><tr><td>Platinum</td><td>-3.66%</td><td>-14.10%</td><td>$1,663</td></tr><tr><td>Silver</td><td>-2.97%</td><td>-15.70%</td><td>$63.37</td></tr><tr><td>Copper</td><td>-2.23%</td><td>-7.00%</td><td>$6.24</td></tr><tr><td>Zinc</td><td>-2.15%</td><td>-4.60%</td><td>$3,439</td></tr><tr><td>Nickel</td><td>-1.48%</td><td>-7.70%</td><td>$17,651</td></tr><tr><td>Palladium</td><td>-1.10%</td><td>-11.20%</td><td>$1,214</td></tr><tr><td>Aluminium</td><td>-1.02%</td><td>-7.00%</td><td>$3,484</td></tr><tr><td>Iron ore futures</td><td>20.00%</td><td>-3.50%</td><td>$101.85</td></tr></tbody></table></div>Source: Market IndexGold price chart (Source: TradingView)The selling appears to have subsided today, with the Materials Index bouncing off session lows of 2.7%, currently down just 0.50%. Most commodity prices have also started to bounce on Thursday, with gold up 1.0% and copper up 0.85% at the time of writing.What's driving commodities lowerThe commodities selloff has been driven by a broad range of catalysts, including:<ul><li>Fed rate expectations have turned hawkish, with Thursday's May core CPI running at 2.9% year-on-year (highest since Sep-25) and headline at 4.2% (highest since Apr-23), markets are now pricing in a 25 bp Fed hike by December, with the possibility of two rate hikes, a clear negative for non-yielding USD-denominated commodities.</li><li>The US dollar is firmer on the hawkish rate repricing, with US Dollar Index is approaching the 100 level. The index has traded mostly sideways for the past year, mostly between 96 and 100, though recent upside pressures commodities.</li><li>US-Iran tensions are driving risk-off flows rather than a commodities bid, with a second day of US strikes near the Strait of Hormuz and Iranian retaliation against four US bases hitting global equity markets.</li><li>China demand backdrop is softening, with May CPI missing at 1.2% y/y vs 1.3% ests and core CPI easing to 1.1%, while PPI hit a four-year high of 3.9% on imported energy costs, a stagflationary mix that dents the bull case for the world's largest metals consumer.</li></ul>Miners at a glanceMost large caps opened sharply lower this morning, but starting to bounce heading into afternoon trade. The average miner is down around 10% this week.<div><table><thead><tr><th colspan="1">Ticker</th><th colspan="1">Company</th><th colspan="1">% Chg</th><th colspan="1">Price</th><th colspan="1">1 Week %</th><th colspan="1">YTD %</th></tr></thead><tbody><tr><td>BHP</td><td>BHP</td><td>0.4%</td><td>$60.46</td><td>-5.4%</td><td>32.8%</td></tr><tr><td>RIO</td><td>Rio Tinto</td><td>0.2%</td><td>$179.74</td><td>-5.4%</td><td>22.4%</td></tr><tr><td>FMG</td><td>Fortescue</td><td>-1.8%</td><td>$19.31</td><td>-12.1%</td><td>-12.3%</td></tr><tr><td>NST</td><td>Northern Star Resources</td><td>-0.9%</td><td>$18.38</td><td>-12.5%</td><td>-25.2%</td></tr><tr><td>AMC</td><td>Amcor </td><td>-1.2%</td><td>$54.71</td><td>2.4%</td><td>-12.5%</td></tr><tr><td>EVN</td><td>Evolution Mining</td><td>0.6%</td><td>$10.79</td><td>-11.9%</td><td>-14.2%</td></tr><tr><td>S32</td><td>South32</td><td>-1.9%</td><td>$4.40</td><td>-9.2%</td><td>23.8%</td></tr><tr><td>JHX</td><td>James Hardie </td><td>-3.1%</td><td>$31.51</td><td>-2.3%</td><td>1.6%</td></tr><tr><td>PLS</td><td>PLS Group</td><td>-1.0%</td><td>$5.71</td><td>-11.0%</td><td>35.8%</td></tr><tr><td>LYC</td><td>Lynas Rare Earths</td><td>-2.6%</td><td>$16.43</td><td>-14.9%</td><td>32.4%</td></tr></tbody></table></div>Data as at 11:50 am AESTMost gold names have also started to bounce off session lows. The below list features the ten largest gold miners by market cap, which are down an average 12.9% over the past week and down 23.6% year-to-date.<div><table><thead><tr><th colspan="1">Ticker</th><th colspan="1">Company</th><th colspan="1">% Chg</th><th colspan="1">Price</th><th colspan="1">1 Week %</th><th colspan="1">YTD %</th></tr></thead><tbody><tr><td>NEM</td><td>Newmont </td><td>-3.3%</td><td>$132.75</td><td>-11.8%</td><td>-11.6%</td></tr><tr><td>NST</td><td>Northern Star Resources</td><td>-0.7%</td><td>$18.42</td><td>-12.3%</td><td>-25.0%</td></tr><tr><td>EVN</td><td>Evolution Mining</td><td>0.4%</td><td>$10.78</td><td>-12.0%</td><td>-14.3%</td></tr><tr><td>PRU</td><td>Perseus Mining</td><td>-1.6%</td><td>$4.60</td><td>-10.6%</td><td>-16.6%</td></tr><tr><td>GMD</td><td>Genesis Minerals</td><td>-2.4%</td><td>$4.77</td><td>-16.7%</td><td>-33.4%</td></tr><tr><td>CMM</td><td>Capricorn Metals</td><td>-2.2%</td><td>$11.25</td><td>-15.3%</td><td>-19.6%</td></tr><tr><td>RMS</td><td>Ramelius Resources</td><td>0.4%</td><td>$2.83</td><td>-12.9%</td><td>-30.8%</td></tr><tr><td>WGX</td><td>Westgold Resources</td><td>-0.8%</td><td>$4.49</td><td>-12.2%</td><td>-28.8%</td></tr><tr><td>RRL</td><td>Regis Resources</td><td>-0.5%</td><td>$5.55</td><td>-11.9%</td><td>-26.2%</td></tr><tr><td>VAU</td><td>Vault Minerals</td><td>0.3%</td><td>$3.81</td><td>-13.0%</td><td>-30.0%</td></tr></tbody></table></div>Data as at 11:52 am AESTThe high-flying lithium sector has also experienced a pronounced pullback, though most large caps (PLS, MIN) are still holding onto healthy year-to-date gains.<div><table><thead><tr><th colspan="1">Ticker</th><th colspan="1">Company</th><th colspan="1">% Chg</th><th colspan="1">Price</th><th colspan="1">1 Week %</th><th colspan="1">YTD %</th></tr></thead><tbody><tr><td>PLS</td><td>PLS Group</td><td>-1.0%</td><td>$5.71</td><td>-11.0%</td><td>35.8%</td></tr><tr><td>MIN</td><td>Mineral Resources</td><td>-1.5%</td><td>$63.24</td><td>-12.8%</td><td>16.3%</td></tr><tr><td>IGO</td><td>IGO</td><td>-1.5%</td><td>$8.31</td><td>-12.2%</td><td>1.5%</td></tr><tr><td>LTR</td><td>Liontown</td><td>-0.2%</td><td>$1.90</td><td>-19.4%</td><td>21.1%</td></tr><tr><td>VUL</td><td>Vulcan Energy Resources</td><td>-1.1%</td><td>$3.12</td><td>-17.8%</td><td>-29.4%</td></tr><tr><td>PMT</td><td>PMET Resources</td><td>-2.3%</td><td>$0.55</td><td>-28.5%</td><td>-8.1%</td></tr><tr><td>CXO</td><td>Core Lithium</td><td>2.1%</td><td>$0.25</td><td>-16.9%</td><td>-10.9%</td></tr></tbody></table></div>Data as at 11:54 am AESTWhere to from here?Commodities are caught in an awkward spot. The near-term catalysts driving this week's selloff, (hawkish Fed repricing, a firmer US dollar, US-Iran tensions and a softening China) are all pulling in the same direction, and that direction is down.However, the bigger picture remains unchanged as factors like AI-driven capex, rising defence spending and a more fractured geopolitical backdrop are all feeding structural demand, and there is no supply response of any note to meet it.Late last year, Morgan Stanley flagged the copper market heading into its largest deficit in more than two decades, around 590,000 tonnes, widening to 1.1 million tonnes by 2029. With so little new supply coming online, the setup feels rather asymmetric. That said, copper is still copper. It remains acutely sensitive to the ebb and flow of global industrial activity, the direction of the US dollar and shifts in sentiment. This is probably why we see the metal go from record highs last week, to a ~7% pullback just six days later.The overall picture looks bullish, but with a sharp pullback across global equity markets, elevated geopolitical tensions and inflationary pressures all in play, volatility is very, very high right now.</div></div></div>

GLDM

159608

The ASX 200 Materials Index plummeted 11% in five days due to a hawkish Fed repricing, a stronger US dollar, US-Iran tensions, and softening Chinese demand. Gold erased its January gains, while other commodities like copper and lithium also declined. Despite the sharp sell-off, structural demand drivers such as AI capex and defense spending remain intact, though near-term volatility is expected to remain high.

Market Index

Albemarle

SPDR Gold Minishares

GF CSI Rare Metals Theme ETF

Invesco DB US Dollar Index Bullish Fund

China Southern CSI SWS Non-Ferrous Metal ETF

Yinhua CSI Non-ferrous Metal ETF

ChinaAMC CSI Subdivision Non-ferrous Metal Sub-Industry ETF

Pro Ultr GLD

iShares Gold Trust

ETFS Capital Ltd.

SPDR Gold Shares

Abrdn Gold ETF Trust

Wtree Bbg Usd Bull

iShares Silver Tr

SPDR S&P Mtls & Mng

ISHRS MSCI Glb Slct Met & Mining

Global X Silver Miner

 BHP Group Ltd

Rio Tinto Limited

Rio Tinto

Fortescue Metals Group Ltd

Northern Star Resources Ltd

Amcor PLC Shs Chess Depository Interests Repr 1 Sh

Amcor

Evolution Mining Limited

South32 Ltd.

James Hardie Industries PLC Chess Units of Foreign Securities

Pilbara Minerals Limited

Lynas Rare Earths Limited

Newmont

Perseus Mining Limited

Genesis Minerals Limited

Capricorn Metals Ltd

Ramelius Resources Limited

Westgold Resources Ltd

Mineral Resources Limited

IGO Limited

Liontown Resources Limited

Vulcan Energy Resources Ltd.

Core Lithium Ltd

BHP Group Limited

BHP Group Plc

Rio Tinto plc

Rio Tinto Group

South32 Limited

Lynas Corporation

ASX 200 miners tumble 11% in five days as Fed, US dollar and Iran tensions hammer commodities