Finding Stability: Your Q3 2025 Economic Review

As we slide into the final quarter of 2025, things are starting to look a little more promising for financial markets.. After a pretty choppy ride so far this year, our clients are beginning to see signs that at last some stability is starting to creep back in, both in Australia and around the world.

The Golden Opportunity

One of the most remarkable things that’s happened this quarter is the way gold has taken off. Prices have just about touched a new record high of around US$4,100 per ounce in early October, and that’s been a real bonus for anyone with exposure to precious metals and resources.

It’s not just one thing that’s driven this – it’s a whole bunch of factors all coming together at once. Central banks around the world are going on a gold-buying spree, investors are chasing safe havens because they’re getting a bit nervous about the state of the stock market, and there are ongoing tensions in the Middle East.

What This Means for Aussie Investors

The gold rush is going to be a real shot in the arm for our national economy. Treasury think that gold exports are going to reach A$60 billion in 2025-26, surpassing LNG to become our second biggest resource export. That should help protect us a bit if China starts to slow down its buying of our iron ore and lithium.

Our gold miners like Northern Star and Newmont Australia are doing a real storming job, and anyone who owns shares in the resources sector through their super or shares portfolio is seeing the benefits.

US Interest Rates: Smoothing Out the Bumps

The US Federal Reserve took a 0.25 % rate cut in September after inflation cooled right back down to around 2.5 % in August. That’s a pretty big deal as it’s now well within their target zone.

Most economists reckon there might be one more little cut before the year is out, but only if employment numbers continue to soften. The IMF are now saying they think US growth for 2025 will be around 2.3 %, which is still respectable but not spectacular.

The US stock market was fairly quiet through the quarter; the S&P 500 edged up just 0.4 %. There was some nervousness about the US threatening to put a 100 % tariff on Chinese goods, but it’s not like we haven’t seen that before.

Aussie Market Performance

Our local market had a bit of a rough quarter; the ASX 200 slipped 1.8 % to close at about 8,880 points. However, that hides a few interesting little stories.

The Standout Performers

Financial sector shares really lifted off, ANZ in particular surged to a ten-year high when it announced its 2030 cost-cutting strategy. Bank stocks are looking pretty attractive to income hunters right now.

The Areas To Watch

Technology, property and healthcare all had a tough time as investors are now pretty keen on quality companies with reliable earnings and dividends.

RBA Holds Firm – What Next For Rates?

The RBA has held firm at 3.6 % since May and isn’t saying much about cutting rates soon, with inflation around 2.1 % year on year and unemployment steady at 4.2 % they’re just keeping a close eye on things at the moment.

What Does It Mean For You?

Right now, the betting is that the next rate cut won’t come until mid-2026, but of course, that could change if things start to go sideways. Thats why

• Mortgage holders are advised to keep budgeting for the current rate and be ready for a potential relief
• Retirees and income hunters are still seeing the benefits of higher term deposit and bond returns
• Property investors have stable rates supporting continued modest growth in housing values.

Oil Prices: A Two-Edged Sword

Oil has been bobbing up and down in a US$82-95 per barrel range this quarter. As OPEC+ production is reduced and US-Iran tensions ease, prices are staying high.

For Aussie investors, that means a double-edged sword: higher fuel prices are a big bonus for our LNG and petroleum producers, but at the same time, they’re causing transport costs to go up, which could reignite inflationary pressures and delay rate cuts.

The RBA has said they’re keeping a close eye on energy prices to see if we can avoid getting back into trouble.

Policy Developments Affecting Your Wealth

There have been a few key policy announcements this quarter that you should be aware of.

The Superannuation Tax Changes

The Federal Government has changed the way they’re going to tax big super balances – rather than taxing people on the growth of their super, they’ll now tax the actual gains:

• 30% tax on gains between $3 million and $10 million
• 40% tax on gains above $10 million

If you’ve got a big super balance, we encourage you to book in a time to review your strategy.

Resource Security Initiatives

The government has announced a $1.2 billion critical minerals stockpile programme and a $600 million package to prop up Glencore’s Mount Isa and Townsville operations – moves aimed at boosting our resource security and safeguarding regional jobs.

Currency Flows

The Aussie dollar has been bobbing about in a fairly tight range – between 63c and 67c – over the past quarter, supported by higher commodity prices but limited by uncertainty overseas. That’s got implications for people with investments or travel plans abroad, or whose businesses rely on imports.

What This Means for Your Financial Plan

As we look to 2026, there are a few key takeaways that should inform your investment approach.

Quality Wins Out Over Speculation: The market’s currently rewarding companies that can show a strong track record – cash flows that keep on coming, reliable dividends – and we’re seeing the speculators falling out of favour.

Don’t forget to diversify: Geopolitical instability and sector-specific challenges are still out there, so it’s more important than ever to have a balanced spread across different asset classes and regions.

Income Generation Matters: Investors nearing or in retirement are really looking for investments that’ll give them a regular, reliable income.

Opportunities in Resources: Australia’s in a good spot when it comes to gold and critical minerals – but do be mindful of the price volatility in these markets.

Our Outlook for Q4 2025

The global economy seems to be getting back into a more stable rhythm as we head toward year-end – inflation’s coming down, employment is looking healthy, and central banks are taking a more measured approach to setting interest rates.

For our clients, this means:

• Keep Calm and Carry On: Avoid overreacting to short-term market movements
• Stick to Fundamentals: Focus on quality assets with solid balance sheets
• Regular Portfolio Reviews: Make sure your asset allocation’s still aligned with your goals and risk appetite
• Take Advantage of Opportunities: Volatility often creates good entry points for long-term investors

What’s Next

If you’d like to have a chat about how these economic developments are affecting your specific financial situation, our Newcastle team is here to help – we can take a look at:

• Your current portfolio positioning in light of changing market conditions
• Strategies to get the most out of your superannuation in response to policy changes
• Income generation approaches that’ll suit the current interest rate picture
• Asset allocation tweaks to set you up for 2026

While there’s always going to be some uncertainty in investing, the big picture suggests we’re moving towards more stable ground. With some careful planning and the right guidance, you can navigate these conditions successfully.

Get in touch with our Newcastle office today to book your Q3 portfolio review and make sure your financial plan is set up for the opportunities ahead.

This update is for information only and not intended to constitute financial advice – past performance is no indicator of future results. Please consult with one of our qualified financial advisors for advice tailored to your individual circumstances.