Market Highlights: Gold, Bitcoin, ASX futures retreat ahead of RBA call today, and 5 small caps to watch

ASX to fall on Tuesday ahead of the RBA decision
The OECD predicts the RBA will cut rates starting from Q3 2024
Uber to be included in the S&P 500 index

Aussie shares are poised to fall at the open on Tuesday ahead of the RBA decision at 2.30pm AEDT. At 8am, the ASX 200 index futures was pointing down by -0.5%.

Overnight, the S&P 500 fell by -0.54%, the blue chips Dow Jones index was down by -0.11%, and the tech-heavy Nasdaq slipped by -0.84%.

Nvidia led the losses for the Magnificent Seven, down by -2.7%.

Uber was up by 2.2% after S&P Global said it will include the stock in the S&P 500 Index later this month. Inclusion in this coveted index typically draws buying from funds that track the benchmark.

The biggest mover overnight was Hawaiian Airlines, which soared by 192% after Alaska Air agreed to pay roughly US$1 billion for the troubled airline.

Back home, the RBA will be having its last board meeting of the year, with an interest rates decision shortly after that.

The central bank has warned that they may have to raise rates again if domestic services inflation does not moderate. Inflation expectations also remain a concern for the RBA, but the good news is that these measures have fallen.

“Our base case is for the RBA to remain on hold at current rates,” said Emma Lawson, a fixed interest strategist at Janus Henderson.

“There is a small chance of a RBA hike priced for February, which also reflects our degree of near-term risk for the RBA. Our base case is for a mild easing cycle to commence in late Q3 2024,” added Lawson.

OECD predicts the RBA will cut rates in …

In its latest Economic Outlook published on Wednesday, the Organisation for Economic Co-operation and Development (OECD) also said the RBA will begin cutting rates in Q3 2024.

The OECD predicts that the RBA will deliver a total of 75 basis points of interest rate cuts between Q3 2024 and the end of 2025, which will steadily take the cash rate down to 3.60%.

Excerpts from the OECD’s report read:

“The unemployment rate [in Australia] is projected to rise moderately, reaching 4.4% by mid-2025.

“Inflation will moderate, aided by abating global inflationary pressures, though inflation of some services components is anticipated to remain elevated throughout 2024.”

Treasurer Jim Chalmers has welcomed this projection, saying: “we are making some welcome progress in the fight against inflation, and that will determine the future directory trajectory of interest rates”.

When it comes to recession, the OECD’s forecasts are also in line with many other experts, including the IMF, in predicting global economies are likely to avoid it.

In other markets …

Gold prices, which touched an all time high in Asian hours yesterday, retreated by -2% to US$2,028.42.

After having collapsed on Friday, US bond yields pulled back (bond prices lower), with the 10-year yield rising by 6bp to 4.25%.

Oil prices fell -1%, with Brent now trading at US$78.11 a barrel.

Iron ore futures traded sideways at US$130.46 a tonne.

The Aussie dollar fell by -0.8% to US66.19c.

Meanwhile, Bitcoin traded above $US42k, and then eased. However, it was still up more than 5% overnight to trade at US$41,840 right now.

5 ASX small caps to watch today

Lord Resources (ASX:LRD)
Results from regional scale soil sampling indicate four high priority Lithium–Caesium-Tantalum (LCT) anomalies at the Jingjing Project. Anomalous LCT pathfinder results indicate the potential for the presence of mineralised pegmatites, under cover. This is the first systematic exploration for LCT mineralisation over the Jingjing Project Area, which is located within the Coolgardie-Norseman Lithium Super-Province 50km northeast of Norseman in WA.

High-Tech Metals (ASX:HTM)
HTM expanded its critical minerals portfolio through grant of the Ketele Exploration License which, located in mineral rich Ethiopia, is considered prospective for LCT (lithium-cesiumtantalum) mineralisation. Ethiopia is home to the Kenticha Lithium and Tantalum Mine. HTM’s Ketele LCT Project covers 42km2 in prospective geology with no modern exploration. Work programme has commenced to evaluate the potential for lithium and associated elements, with results expected in the coming weeks.

Mount Ridley Mines (ASX:MRD)
Drilling has returned wide, high-grade REE intersections at two new prospects at the Mount Ridley Project. New drilling highlights include: 15m at 2,919ppm TREO (20% MagREOiii) from 18m, and 26m at 1,808ppm TREO (21% MagREO) from 15m.

Asra Minerals (ASX:ASR)
Drilling preparations have begun for the Little Wonder Gold Deposit at Asra’s Mt Stirling Project in Leonora. The prospective site has historically produced 950oz at exceptionally high grade of 1,180g/t gold. The first drill work will be supported by recent placement funding, while geochemical and metallurgical work continues on Asra’s lithium and REE projects.

Vertex Minerals (ASX:VTX)
Further high-grade gold targets were identified south of Vertex’s Hill End Gold Plant and Reward Resource. Ground truthing LiDAR data reveals further workings around the South Star group of mines. Multiple parallel gold bearing quartz veins were discovered at South Star strike >800m. No drilling has been carried out at South Star, and only limited sampling has been completed.

At Stockhead we tell it like it is. While Battery Lord Resources,Mount Ridley Mines and Vertex Minerals are Stockhead advertisers, they did not sponsor this article.