ASX major indices enter new range

The Australian indices have been climbing steadily to push higher above the 6800-7000 range. They may be entering a new 200-300 point range in line with other developed market indices such as the US. The Australian indices have not broken past pre-covid-19 levels as of yet, but have been known to generally lag behind their counterparts in other developed markets. Despite this, they are showing a strong upward trend to continue at a slow but steady pace.

Gold producers have been shinning through and helped push the Australian markets for a positive open. The gold spot price continues to be above the previous 1800-20 resistance. Gold has now pivoted for a strong reversal from the 1678-1680 daily range lows and has been pushing rapidly higher. Even after the announcements of US sanctions on Russia from the Biden administration.

The resource and primary agriculture heavy weighting Australian indices though may still face some headwinds as China is moving from sourcing a lot of minerals and food suppliers (dairy, for example, ASX:A2M facing strong sell-off volumes) as China look to alternative options such as the Brazilian markets and other more cost-effective producers/exporters. China does continue to shake the global demand of cattle prices (rising steadily since 2020 lockdown periods) with abattoirs in Brazil now reportedly running out of livestock for processing then exporting overseas and trying to export as much as possible to meet the demand as well as boosting the economy hit harshly by covid-19. Iron ore being exported from Brazil is also addressing the needs of steel in two of the largest consumers - The US and China. Some local state governments in Australia, such as N.S.W. for example, have turned to try to reach out to other international trade partners like the U.K. for direct trade agreements to wean off the reliance on exports to China to make up the majority of demand.

(Photo supplied by Wix)