Early sales events push retail spend higher
Discounts prove irresistible to shoppers motivated by cost of living pressures
2 min
Early end-of-financial-year promotions and mid-year sales events attracted consumers to the shops in May, with Australian retail turnover rising 0.6 percent, according to seasonally adjusted figures from the Australian Bureau of Statistics (ABS). This compares to a 0.1 percent rise in April and a 0.4 percent fall in March.
Robert Ewing, ABS head of business statistics, said consumers were “watchful” and motivated by discounts amid today’s high cost of living.
“Many retailers started end-of-financial–year sales early, offering larger discounts than usual and noted that shoppers remain price-sensitive in response to persistent cost-of-living pressures,” Mr Ewing said. “Retail businesses continue to rely on discounting and sales events to stimulate discretionary spending, following restrained spending in recent months.”
However, May’s boost belies “stagnant” underlying demand trends. Mr Ewing notes retail trading in trend terms is up by 1.5 percent over the year to May, which is very low. Gareth Aird, Head of Australian Economics at CBA, points out that population growth in 2023 was 2.5 percent, so on a per-capita basis a 1.5 percent lift in spending is exceptionally weak.
Mr Aird said shoppers are “savvy, cautious and price sensitive” and “more tactical than usual when determining when to spend on discretionary items”. Non-food retail was stronger than food retail in May, with the highest rise being a 1.6 percent lift in clothing, footwear, and personal accessories spending. Household goods spending lifted 1.1 percent.
Deloitte Access Economics partner, David Rumbens, says frugality is “back in vogue” with persistently rising prices for essentials like rent, insurance and utilities forcing consumers to cut back on discretionary purchases. An expected reduction in population growth as immigration reduces over the next year may also keep retail spending weak.
Deloitte’s latest retail forecasts point to a rocky road ahead, particularly if unemployment rises. Mr Rumbens said the 3.75 percent lift in minimum and award wages give consumers more spending power but will put pressure on business costs. He points out retail and hospitality insolvencies are increasing in today’s economy.
However, tax cuts and eventual interest rate cuts should lead to more retail spending in the second half of 2024 and in 2025. Deloitte forecasts no growth for retail spending overall in 2024 but a 2.5 percent uplift in 2025. “Household goods turnover should pick up more with better economic conditions and with an uplift in national building activity, supported by the Government’s ambitious housing targets,” Mr Rumbens said.
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Gold miners are emerging as a compelling way to navigate market uncertainty, with analysts pointing to strong cash flows, attractive valuations and rising profit margins. As gold prices stabilize above US$4,000 an ounce, mining stocks could offer investors both downside protection and long-term upside.
3 min
Gold is one of the market’s go-to hedges in rocky times. Don’t forget that gold miners’ stocks are too.
The stock market’s gains in 2026 belie the rocky macroeconomic picture: elevated inflation, heightened geopolitical tensions, and jitters about the artificial-intelligence trade. That backdrop, in theory, should be the time for gold to shine. Instead, the price of the yellow metal has tumbled more than 5% so far, after last year’s blistering 65% rally. In part, the U.S. dollar’s recovery has stymied gold, which benefited from the greenback’s weakness in 2025.
Even with the precious metal’s recent weakness, gold mining stocks could be the best way to profit from this year’s uncertainty.
Gold miners “are a valuable hedge against macro risks that would likely be damaging for equities,” BCA Research’s Noah Weisberger and Rishabh Shah wrote this week.
Concerns about the Federal Reserve’s next moves to tackle inflation, the increasingly crowded AI trade, and steep valuations for tech stocks are just some of the drivers that could help gold’s price get on even footing— and lead to even bigger gains for miner stocks.
These stocks’ prices tend to outpace gold’s moves, because the companies have fixed operational costs. So when gold’s price rallies, their profit margins soar, and vice versa. For instance, the VanEck Gold Miners GDX +7.39% exchange-traded fund has fallen 11% this year as the metal has slumped.
Now, gold’s price just needs to stabilize to help miners’ stocks take off, and that seems to be happening. The precious metal has recently found support above the $4,000 level, and has stuck in a narrow range since the end of June. But its price rose ever so slightly in July, ending a four-month losing streak for the metal. Technical analysis also suggests that gold is due for a comeback.
Barron’s recently wrote that the pullbacks for both gold miners and the metal itself are overdone. Senior technical analyst Doug Busch noted that the VanEck ETF is on the “verge of a breakout” and has the potential to hit $11o in early 2027, up more than 40% from its current price.
Gold miners also have more than their role as a market hedge going for them. Their fundamentals are solid, too, says Chris Mancini, portfolio co-manager of the Gabelli Gold Fund.
“Precious metals miners are generating substantial amounts of free cash flow given profit margins of over $2,000 per ounce, and are returning this cash to shareholders through buybacks and dividends,” he said in an email.
“Buying the miners is a cheap way to get exposure to the price of gold,” he added. His fund owns Newmont NEM +6.71%, a Barron’s stock pick last year, and Agnico Eagle Mines as top holdings, as well as miners Northern Star Resources, Endeavour Mining, and Kinross Gold K+8.59%.
Miners are better businesses than they used to be, the BCA team added.
“Capex is more disciplined, margins are high and rising…and they are largely independent of the AI story,” Weisberger, BCA’s head of equities, and Shah, a senior analyst, wrote.
That last part is key. AI is disrupting the software industry and many other services and information-oriented businesses, and investors have piled into AI stocks. But ChatGPT, Claude, Grok, and other large-language models aren’t going to replace the need to mine for metals.
“Equity portfolios can benefit from exposure to quality that is uncorrelated to AI risk, and gold miners fit the bill,” the BCA team said.
They recommend that investors buy the VanEck Gold Miners ETF, which owns top miners such as Agnico, Barrick Mining ABX +7.24%, and Newmont.
An important bonus for big gold miners’ stocks is that their valuations are attractive after the gold’s pullback, too. The VanEck ETF is now trading at just a little more than nine times next year’s earnings estimates. That’s a big discount to its five-year average price-to-earnings ratio of 14, according to FactSet.
What’s more, the ETF is currently valued at a more than 50% discount to the S&P 500 SPX -0.17%, which is trading for about 19 times earnings estimates for 2027. Mining stocks have typically traded at just a 25% discount to the broader market over the past five years. So there is significant upside for the group if valuations move back toward normal levels.
One factor that complicates mining stocks as a market hedge, of course, is if stocks bounce back, which has been the case so far in August.
But both the market and economic outlooks remain cloudy, and investors remain nervous about the Fed’s next moves and AI stocks. Gold miners should do just fine, even if the anxious mood on Wall Street persists.
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