Interest rate cuts propelled the Australian share market to its highest level ever in October 2025, but expectations of rate hikes in 2026 have since pushed the Australian dollar higher and the ASX has fallen from its record. Market analysts expect gold and AI stocks to continue performing well next year, though global markets may face increased volatility due to US President Donald Trump's unpredictable governing style.
As 2025 draws to a close, a look back at the year's best-performing stocks reveals that mining stocks have been standout performers, with some doubling or tripling in value. Liontown Resources, a battery minerals company that reported a $193 million loss in the previous financial year, saw its share price surge 180% since January. The company counts mining billionaire Gina Rinehart as its largest shareholder and has lithium supply deals with Tesla, Ford, and LG, as well as a $50 million investment from the federal government.
Other lithium miners also enjoyed strong gains: Core Lithium rose 220%, Pilbara Minerals gained 89%, and IGO increased 65%. The rally was driven by a rebound in lithium prices and expectations of strong electric vehicle demand, particularly in China. Gold miners also featured prominently, with Regis Resources, Genesis Minerals, Evolution Mining, and Newmont Corporation roughly tripling in value as the price of physical gold hit new record highs, climbing as high as $US4,532 an ounce last week.
Gemma Dale, nabTrade's head of investor behaviour, attributed gold's rise to central banks buying gold as they move away from the US dollar and US dollar assets like Treasury bonds. Gold is seen as a safe-haven asset amid global uncertainty, with US President Donald Trump's erratic policymaking and tariff policies cited as reasons for its popularity. The Federal Reserve has slashed interest rates three times in 2025, contributing to a 10% decline in the US dollar's value this year.
Overall, the ASX 200 rose 10% (including dividends), and the All Ordinaries index gained 7%. Investors who bought after Trump's 'liberation day' tariff-induced crash in early April and sold at the record high in late October would have seen gains of about 24%. Jun Bei Liu, lead portfolio manager at Ten Cap, described 2025 as a year of 'volatility' and 'stress,' noting that Trump's open tariff negotiations caused extreme swings in share prices. Dale also found the year stressful due to concerns over tariff announcements.
