The Australian share market opened weaker on Wednesday as gold and silver prices suffered major declines. The S&P/ASX 200 index fell sharply by 1.12 per cent to 8,993 points, retreating from its record high of 9,115 set earlier in October. The downturn followed a steep global correction in precious metals prices, which weighed heavily on local mining stocks.
ASX 200 fell sharply in the morning
Gold’s Historic Plunge
Gold tumbled to US$4,067 per ounce, down 6.6 per cent from yesterday’s high of US$4,356, the biggest single-day drop in more than 12 years. Silver mirrored the fall, slipping by 8.7 per cent to trade at US$48 per ounce. The S&P/ASX All Ordinaries Gold Index declined by 9.5 per cent, erasing part of the year’s substantial gains.
Market analysts pointed to profit-taking after sustained record rallies through 2025. Alexander Stahel, a resources investor in Switzerland, said, “A drop of more than 5% is rare. In theory, it would be once in hundreds of thousands of trading days”.
Gold prices crashed today after yesterday’s high
Analysts Discuss Market Dynamics
Ole Hansen, a commodities strategist at Saxo Bank, highlighted that traders had anticipated a correction. He said, “In the last couple of trading sessions traders have increasingly been looking over their shoulders, as concerns about a correction and consolidation have arisen”.
Helen Amos, a commodity analyst at BMO Capital Markets, commented, “When you’ve got that much money quickly coming into the space, it’s only natural to expect some of that money to leave as well when people have made a quick return”.
Amos maintained a long-term optimistic stance, noting, “We like the gold story; we think the gold story is fundamentally a good one. We’re forecasting prices around US$4,500 next year”.
ASX 200 Gold Stocks Take a Hit
The slump in bullion prices triggered steep sell-offs among major gold miners. Northern Star Resources fell 10.9 per cent but retained a 49.1 per cent year-to-date gain. Newmont Corporation lost 10.8 per cent yet stayed up 115.1 per cent for the year. Ramelius Resources dropped 11.0 per cent, Evolution Mining slid 10.4 per cent, and Perseus Mining declined 10.1 per cent, all still trading far higher than at the start of 2025.
Newmont Corporation shares took a hit after a sudden gold crash
Broader Market Reaction
Outside of gold miners, sentiment across the ASX reflected investor caution. Technology One gained 0.10 per cent at A$38.80, while Charter Hall rose 0.22 per cent at A$22.89. Orica slipped 0.21 per cent to A$21.20, and Mineral Resources dropped 1.23 per cent to A$41.00.
Despite the day’s fall, the ASX 200 remains 9.45 per cent higher year-on-year and up 1.66 per cent for the month. The broader market continues to find support from robust corporate earnings and optimism surrounding recent US-Australia trade developments on critical minerals.
Global Factors Weigh on Sentiment
The decline coincided with modest softening on Wall Street, where US indices recorded mixed results overnight. Investor appetite weakened as traders assessed the implications of the gold correction and shifting global trade dynamics.
In Asia, equity markets traded in a mixed pattern. Japan’s Nikkei dropped 1.08 per cent as the country transitioned to new leadership, while China’s Shanghai Composite gained 1.36 per cent amid steady manufacturing output.
Rare Earths and Critical Minerals Stay Resilient
The recent US–Australia agreement on critical minerals continued to bolster related sectors. Arafura Rare Earths held flat after rising strongly at open, while VHM Limited gained 20.7 per cent, and Cobalt Blue advanced 14.3 per cent earlier in the week. The pact between President Donald Trump and Prime Minister Anthony Albanese signalled a tightening strategic partnership, moving the alliance “to the next level,” according to the Australian leader.
Investors Eye Longer-Term Outlook
Despite the day’s downturn, analysts emphasised the strength of the underlying market. The ASX has advanced more than 9 per cent over the past year, supported by global trade optimism and technological innovation across local firms.
The steep decline in gold prices is seen as a short-term correction rather than a structural reversal. Analysts expect bullion to stabilise near US$4,200 in coming weeks, driven by ongoing geopolitical uncertainty and central bank purchases.
Also Read: Gold Tumbles 5% in Biggest Sell-Off Since 2020
Sector Highlights
Life360 climbed 0.77 per cent to A$45.76, continuing its stellar rise of 108.19 per cent this year. Dexus Property and GPT rose marginally, demonstrating investor confidence in commercial property resilience. TPG Telecom remained steady at A$5.33, with a modest 15.8 per cent yearly gain.
The fall in gold could redirect investor capital into energy and infrastructure sectors, both showing steady earnings growth. Market analysts note investors are diversifying amid metal price volatility to preserve gains from 2025’s strong rally.
Market Forecast
Trading Economics analysts project the ASX 200 to close the quarter near 8,844 points and forecast a level around 8,283 by next year. Such projections suggest consolidation after an extended growth cycle.
The index’s record run earlier this month came as Australia solidified global supply chain links through new resource partnerships. The latest correction may provide fresh entry points for investors assessing resilient industrial and technology stocks.
Closing Perspective
The ASX’s downward move reflects caution after a period of strong momentum. With gold and silver under pressure, market attention now shifts to fundamental sectors linked to trade, energy, and technology. Analysts continue to view the market’s broader tone as constructive, influenced by economic stability and ongoing resource demand.
The session’s volatility underscores how global commodity shifts ripple through Australian equities, shaping investor sentiment in the final quarter of 2025.
