Gold shares higher, retail investors chase EV, biotech sector gets a bid

Market Reports

by Tim McGowen

Gold stocks are stronger across the board as the price of gold reaches one month highs as the $US weakens and geopolitical tensions rise with China & Taiwan. The annual Diggers & Dealers conference in Kalgoorlie also may have helped add some excitement to the sector this week

Shares of Oceanagold (ASX:OGC) are the highlight this morning, currently trading 8.3 per cent higher at $2.61.

Despite some extraordinary strength in the BNPL sector over the week - shares in Block (ASX:SQ2) - the owner of Afterpay - are lower this morning post their second quarter results. And while its earnings and revenue came in ahead of the market’s expectations its guidance has disappointed. Management revealed that its Square ecosystem gross payment volume growth is expected to moderate. Shares are down 5.6 per cent to $118.98.

Australia's European Lithium Ltd (ASX:EUR) said on Friday it has signed an agreement with German automobile maker BMW to supply battery-grade lithium hydroxide. The firm, which is engaged in lithium exploration and development in Austria, said if a binding contract was signed after the initial non-binding Memorandum of Understanding (MoU). BMW will make an upfront payment of $15 million. The proceeds from BMW's pre-payment will be used to start the construction phase of flagship Wolfsberg Project in Vienna, European Lithium said. Shares are currently trading 14.6 per cent higher at 9.4 cents. European Metals, (ASX:EMH) which is based in Czech Republic has rallied on European Lithium’s news.

The EV battery thematic continues to find support levels despite the sector being heavily shorted. It appears retail investors remain its biggest supporters as they become more confident as global market volatility eases. Shares in Novonix (ASX:NVX), Magnis Energy (ASX:MNS) and Lake Resources (ASX:LKE) are leading the charge.

Signs of life are emerging in the biotech sector on the ASX, despite the proxy for the life science sector globally, the SPDR S&P Biotech ETF (XBI), having lost more than half of its value since February 2021 - the longest decline on record. Shares in Antisense Therapeutics (ASX:ANP) are up 8.9 per cent with Kazia Therapeutics (ASX: KZA) up 10.6 per cent and Incannex Healthcare (ASX:IHL) up 24 per cent.

At noon, the S&P/ASX 200 is 0.12 per cent or 8.10 points higher at 6983.00.

The best-performing sector is Materials, up 1.04 per cent. The worst-performing sector is Energy, down 2.11 per cent.

The best-performing stock in the S&P/ASX 200 is Novonix (ASX:NVX), trading 9.59 per cent higher at $2.97. It is followed by shares in Life360 (ASX:360) and Ramelius Resources (ASX:RMS).

The worst-performing stock in the S&P/ASX 200 is Block (ASX:SQ2), trading 6.06 per cent lower at $118.44. It is followed by shares in Whitehaven Coal (ASX:WHC) and Viva Energy Group (ASX:VEA).

Commodities and the dollar

Gold is trading at US$1791.63 an ounce.
Iron ore is 4.0 per cent lower at US$103.80 a tonne.
Iron ore futures are pointing to a fall of 0.2 per cent.
One Australian dollar is buying 69.67 US cents.

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