The familiar pre-Christmas gloom at the club was conspicuously absent. In its place, veteran brokers were loudly comparing their multi-bagger stock wins like golfers discussing handicaps. For Dollar Bill, this was the first clear sign that 2025 was no ordinary year. After a prolonged period of rate anxiety and stagnant liquidity, the Australian share market, particularly its small-cap end, remembered how to party.
The Macro Circus and the Precious Metals Parade
The stage was set by a global macroeconomic circus. The US dollar showed uncharacteristic weakness, central banks globally pivoted towards inevitable rate cuts, and the return of President Trump to the White House threw tariffs and critical mineral supply chains into a blender. Markets, craving clarity above calm, got it in bold strokes. This geopolitical and monetary shift split global commodity allegiances, with Australia's junior resources sector becoming an accidental, but enthusiastic, beneficiary.
The undisputed anchor of the rally was gold. The yellow metal didn't just climb; it detonated, soaring roughly 70% year-to-date. It punched through a staggering new high above US$4500 (A$6700) per ounce just before Christmas. This explosion turned marginal tenements into valuable assets and made producers and explorers alike recalculate their fortunes. While small caps led, giants like Evolution Mining surged over 165%, Newmont jumped 150%, and Lynas Rare Earths, riding dual tailwinds, finished up 95%.
Yet the real standout was the perennial understudy: silver. The metal more than doubled, with spot prices up approximately 140% for the year. It wasn't just following gold; it was leading the precious metals parade, its sudden importance to both industrial supply chains and investors leaving many scrambling to price it appropriately.
Fireworks in the Small and Mid-Cap Arena
Below the $5 billion market capitalisation line, the celebrations turned raucous. Companies with tangible businesses caught powerful tailwinds. 4DMedical skyrocketed 760% as its lung-imaging technology achieved commercial breakthrough. Defence player EOS soared 677%, and gold explorer Predictive Discovery surged 230% on the super-cycle. This wasn't speculative froth but genuine momentum in real enterprises.
The mid-cap space also buzzed with activity. Regis Resources, Genesis Minerals, and Liontown Resources all delivered staggering gains of around 200% for the year. The trajectory wasn't always smooth, as shown by DroneShield. The defence darling started hot before collapsing late-year when its long-serving Managing Director sold his stock, a move that reminded Dollar Bill of his cardinal rule: when management runs for the exit, don't wait around.
The Spectacular Overachievers and Inevitable Disasters
Some performances bordered on the unbelievable, transforming back-of-a-napkin speculation into monumental gains. Dateline Resources rose an astonishing 7566% after a combination of a promising Californian gold project and rare earths 'nearology' was unexpectedly blessed by President Trump, briefly inflating its value by over 22,000%. Sunrise Energy jumped 3510% on scandium demand, and Forrestania Resources climbed 2092% as the gold price resurrected marginal projects.
The micro-cap Kaili Resources provided the year's most surreal moment, briefly surging over 50,000% in a few days from 0.06 cents to $3.18, a move that prompted curious ASX queries and amused observation from Dollar Bill over a bold red wine.
Yet no party is without casualties. The biotech sector lived up to its volatile reputation. Botanix Pharmaceuticals collapsed 75%, Telix Pharmaceuticals shed 60%, and even index heavyweight CSL lost 36%, wiping nearly $30 billion in value following softer vaccine guidance.
2026 Outlook: Is the Revival Here to Stay?
As the year closes, the question turns to 2026. The recent rate cuts in the US and Australia are now flowing into economic forecasts. The bull case for gold remains strong, underpinned by central bank buying, persistent geopolitical tensions, and expansive fiscal policies. Silver has graduated from sidekick to main protagonist. Critical minerals like rare earths, gallium, and scandium are firmly entrenched in Western industrial strategy, and the global AI build-out continues to hunger for copper and specialised materials.
This small-cap revival feels different. It was driven not by mere euphoria but by capital decisively exiting defensive hideouts and rediscovering its appetite for growth and leverage. That shift rarely reverses quickly. As one of the club's old regulars remarked to Dollar Bill, it feels like 2005 again. He's usually wrong, but this time, he might be onto something. For the first time in years, the market feels truly alive—and in 2026, it might just start to believe in itself.
