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John Paulson, a billionaire investor, believes that gold will be near $5,000 in 2028.
In an interview, John Paulson, a billionaire investor who has reaffirmed his commitment to U.S. mine projects, said that central bank gold purchases and global trade tensions will likely push bullion to prices near $5,000 per ounce by the year 2028. Gold reached a record-high just above $3.500 last week, and banks are now increasing their estimates. Deutsche Bank, for example, believes that bullion will reach $3,700 per ounce next year. Paulson, who is already the largest shareholder of Idaho gold and antimony developer Perpetua Resources in Alaska, bought last week a 40% stake from Barrick in NovaGold’s Donlin project. When asked where he expected bullion to go, Paulson quoted a recent estimate that he received for levels in the "high $4,000" range within three years. "It is a well-informed forecast." Paulson stated, "I think that number is reasonable." "Central banks and the public are looking to invest their money in more stable sources... "I think that gold will continue to increase in importance around the globe," he said. The New York-based investment cited the Western confiscation after Moscow invaded Ukraine of Russia's holdings of foreign reserves as a catalyst to get central banks around the world - and especially China - to buy gold. Paulson stated that "when the war began, (Russian) kept their gold reserves, which were safe, but their cash – the paper reserve – was confiscated." "So, that made other central banks wake up and ask... "What happens if there is a conflict with America? "Would the U.S. be able to keep our treasuries and our savings disappear?" Paulson stated. He said that the global trade uncertainty, which is fueled by Washington's new tariffs in part, further supports gold. The best option if you lose faith in the dollar (U.S.), is to use gold as a currency reserve, said Paulson. He was being considered for a position in Donald Trump's cabinet during his second term. Paulson refused to disclose details of his conversations with Trump. However, he said that the president was "very pro-America first, the golden age of America and bringing manufacturing, mining and other industries back to America." Paulson has been investing in gold for many years and has said that he is not interested in expanding his investments into other metals or copper. He said that other minerals were a different world and they are not where he wants to focus his efforts. Paulson, the largest shareholder of Perpetua in Idaho, has been receiving support from Trump's White House. Perpetua received its federal mining license in January and is now applying for funding through the U.S. Export-Import Bank. Perpetua’s gold production has been seen as a financial boost to the mine’s antimony production, and ensures a domestic supply for the Pentagon of the metal used in bullets and weaponry. China has banned antimony exports from the U.S. Perpetua works with Sunshine Silver & Refining, backed by Thomas Kaplan’s Electrum Group, to build an antimony refining facility. Sunshine has permits to build a refinery that would meet 40% of the country's antimony needs. Kaplan said that the process of refinement was well established. "We are just upgrading it, and putting it into production." Paulson stated that the Donlin Project in Alaska has been granted federal permits. Paulson also said operating costs should be around $1,000 per ounce, which is far below the current gold price. Paulson and Electrum have also invested in International Tower Hill which is developing a gold mine in Alaska, as well Trilogy Metals which aims at developing projects in Alaska's Ambler District.
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Ecolab confirms its annual profit forecast despite tariffs and a weak quarter
Ecolab, a water solutions company, kept its annual profit outlook unchanged on Tuesday in spite of tariff uncertainty and lower first-quarter revenues and profits. This sent its shares up 1.7%. The company that offers water services such as cleaning, sanitization and cooling to many industries still expects to see earnings grow between 12% and 15% this year. Ecolab uses its diverse supply chain and its 'local-for-local' production model, as well as a recently announced surcharge of 5% on all products and services sold in the U.S., to minimize tariff impact. The tariffs imposed by President Donald Trump on his trade partners and the retaliatory measures taken by other countries, such as China have raised concerns that raw materials and equipment prices for companies like Ecolab could increase. The company's sales for the first quarter fell by 1.5% compared to a year earlier, reaching $3.69 billion. This was due to the sale of its surgery unit announced in 2013 and the weak demand from customers. The company reported a profit of 402.5 million dollars, or 1.41 cents per share for the quarter ending March 31. This compares to $412.1 millions, or 1.43 cents per share a year earlier. Saint Paul, Minnesota based company also predicted current quarter adjusted profits between $1.84 and $1.94 each share. According to data compiled from LSEG, analysts were expecting $1.90 a share. (Reporting and editing by Sahal Muhammad in Bengaluru, Katha Kalia from Bengaluru)
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S&P Global believes that the US and China can breathe easier in their trade war with rivals S&P Global.
S&P Global’s top sovereign analyst said that a trade conflict is unlikely to have a significant impact on the credit ratings of China and the United States. Instead, damage will likely be concentrated in poorer countries or those who are already under downgrade warnings. S&P confirmed its "stable outlook" on its AA+ U.S. government credit rating, days before Donald Trump announced his massive round of trade tariffs for the global market in early April. The U.S. government's debt, which is close to 100% of GDP and the fiscal deficit that runs at 6-7% of GDP are its main credit weaknesses. It also highlighted the uncertainty surrounding Trump's policies and trade deals. Trump's tariffs have led to a reduction in global growth predictions. S&P managing Director Roberto Sifon Arevalo said that most major economies ratings should be able, for the time being, to handle the pressures. "At first, there was a flashback of the COVID period and the thought that this is another global crisis." When you look at the bigger picture, and the transmission channels that are available, it remains a question: Will this be enough to significantly change the creditworthiness of sovereigns worldwide? This does not mean, however, that the ratings for negative outlooks (the rating agency's term for warnings of a downgrade) will not go down. Or that the outlooks will not be lowered as they have already been in Slovakia and Egypt. More importantly, there shouldn't really be any major surprises. According to an S&P model based on credit default swap data, investors are currently pricing a five-notch downgrade for the U.S. and a three-notch cut to China's score of A+. S&P's U.S. credit rating hasn't been lowered since 2011, when it was downgraded from triple-A. China hasn’t seen a cut since 2017, but Fitch, its counterpart, cut Beijing a notch after Trump’s tariffs announcement. Sifon Arevalo stated that "for China and the U.S., there is room (for ratings)." He said that it is not the length of time the tariffs will remain in place that will determine how the two countries are rated, but there must be "some sort of resolution" (on tariffs) within the next few months. In China, it was about how much stimulus the country would inject to offset tariffs. Big Questions S&P is concerned more about possible knock-on effects such as a prolonged slump in commodity prices, such as metals and oil. Many countries depend on these commodities for a large part of their income. Sifon Arevalo stated that "if you have a large swing in commodity price, it has a much greater impact on ratings." Oil prices are 20% lower now than in mid-January. If Trump follows through with his plans to impose tariffs of 20% on EU countries, European ratings may also be put under further pressure. He welcomed Germany's plans to spend half a billion euros on defence and infrastructure, but warned that the current trade problems could further erode the already weak economy of the EU. Sifon Arevalo stated that "if these trade uncertainties are not resolved soon, there will be serious fiscal implications across the continent." You need growth to support fiscal consolidation. Tariffs are not helpful.
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S&P Global believes that the US and China can breathe easier in their trade war with rivals S&P Global.
S&P Global’s top sovereign analyst said that a trade conflict is unlikely to have a significant impact on the credit ratings of China and the United States. Instead, damage will likely be concentrated in poorer countries or those who are already under downgrade warnings. S&P confirmed its "stable outlook" on its AA+ U.S. government credit rating days prior to President Donald Trump's announcement of his global trade tariffs. The U.S. government's debt, which is close to 100% of GDP and the fiscal deficit that runs at 6-7% of GDP are its main credit weaknesses. It also highlighted the uncertainty surrounding Trump's policies and trade deals. Trump's tariffs have led to a reduction in global growth predictions. S&P managing Director Roberto Sifon Arevalo said that most major economies ratings should be able, for the time being, to weather these strains. "At first, there was a flashback of the COVID period and the thought that this is another global crisis." When you look at the bigger picture, and the transmission channels that are available, it remains a question: Will this be enough to significantly change the creditworthiness of sovereigns worldwide? This does not mean, however, that the ratings for negative outlooks (the rating agency's term for warnings of a downgrade) will not go down. Or that the outlooks will not be lowered as they have already been in Slovakia and Egypt. More importantly, there shouldn't really be any major surprises. According to an S&P model based on credit default swap data, investors are currently valuing a five-notch downgrade for the U.S. and a three-notch cut for China's A+ rating. S&P's U.S. credit rating hasn't been lowered since 2011, when it was downgraded from triple-A. China hasn’t seen a cut since 2017, but Fitch, its counterpart, cut Beijing a notch after Trump’s tariff announcement. Sifon Arevalo stated that "for China and the U.S., there is room (for ratings)." He said that it is not the length of time the tariffs will remain in place that will determine how the two countries are rated, but there must be "some sort of resolution" (on tariffs) within the next few months. In China, it was about how much stimulus the country would inject to offset tariffs. Big Questions S&P is concerned more about possible knock-on effects such as a prolonged slump in commodity prices, such as metals and oil. Many countries depend on these commodities for a large part of their income. Sifon Arevalo stated that "if you have a large swing in commodity price, it has a much greater impact on ratings." Oil prices are 20% lower now than in mid-January. If Trump follows through with his plans to impose tariffs of 20% on EU countries, European ratings may also be put under further pressure. He welcomed Germany's plans to spend half a billion euros on defence and infrastructure, but warned that the current trade problems could further erode the already weak economy of the EU. Sifon Arevalo stated that "if these trade uncertainties are not resolved soon, there will be serious fiscal implications across the continent." You need growth to support fiscal consolidation. Tariffs are not a good idea. (Reporting and editing by Hugh Lawson; Marc Jones)
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Battery industry: $100 billion US investment depends on Washington support
The manufacturers and developers of U.S. Energy Storage Projects said that their industry would invest $100 billion in this decade to create an entirely domestic battery supply chain. However, they warned that the goal is contingent upon Washington's support. The American Clean Power Association is a trade association that represents energy storage firms. Its members aim to reduce the sector's dependence on China, who currently supplies most of the U.S. battery supply. The storage projects are therefore likely to be severely affected by the decision of President Donald Trump to impose 145% tariffs on Chinese imports. The industry wants a nuanced approach in order to encourage domestic production. Jason Grumet, CEO of ACP, said in a press conference with reporters before the announcement that "China stole our entire supply chain for over a decade. We're not going get it back within 10 weeks." If the administration begins to see batteries as an important national security technology, then we will move away from broad-based reciprocal duties, which is a blunt way of grabbing attention, and into a strategic conversation. Grid storage projects - mainly large lithium-ion battery systems – can help wind and solar resources by storing energy when the sun shines and the wind blows so it can be later used. According to the U.S. Energy Information Administration, the U.S. utility scale battery capacity increased by 66% in the past year. It was only second to solar for the addition of capacity to the grids. The clean-energy industry has been on alert ever since Trump assumed office in January. He promised to increase fossil fuels, undo climate and renewable energy policies set by his predecessor, Joe Biden, and boost the use of fossil fuels. ACP stated that the $100 billion investment would create 350,000 new jobs, and include between $10 to $15 billion of active projects. These include a Tesla cell factory in Sparks Nevada, a Fluence plant in Tennessee, LG’s Holland, Michigan plant, and an Weirton West Virginia facility by the startup Form Energy. (Reporting and editing by Marguerita Choy)
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Police report: Five Kenyan quarry workers were killed by suspected al Shabaab militants, according to a police report
According to a Kenyan Police report, five quarry workers died and two were injured in an attack on their vehicle by suspected al Shabaab terrorists in northeastern Kenya Tuesday morning. Reports say that 10 gunmen, allegedly from an al Qaeda group based in Somalia, ambushed a minibus with workers near Bur Abor Village, Mandera County at 6 a.m. (0300 GMT), and forced them to get out. They were asked to hand over their ID cards and phones. The police report stated that (they were) fatally shot as they lay down. The report stated that another 13 people fled into the bush before being rescued. Kenya's Police spokesperson did not respond immediately to a comment request. Al Shabaab is waging a war against the Somali Government since 2007. Its goal is to seize control and establish a rule based upon its strict interpretation of Islamic Law. The Islamist group frequently conducts cross border raids in Kenya, which is a major contributor of troops to the African Union's peacekeeping mission. (Reporting and writing by Humphrey Malalo, Editing by Aidan Lewis).
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World Bank expects commodity prices to fall back to levels before COVID
The World Bank forecast on Tuesday that a weakening of global growth, due to trade tensions, will drive global commodity prices down by 12% in 2020 and another 5% to their lowest levels in the 2000s. According to the latest Commodity Markets Outlook Report from the development lender, inflation-adjusted commodity prices will fall to their average 2015-2019 in the next two year, bringing an end to the price boom fuelled by the COVID-19 recovery and Russia’s invasion of Ukraine 2022. This decline may moderate the inflation risks that are associated with new U.S. trade barriers and steep tariffs, but could also have adverse consequences for developing countries that export commodities. Indermit Gil, World Bank's Chief Economist, said that higher commodity prices were a boon to many developing countries. Two-thirds are exporters of commodities. Now we are seeing the most volatile price levels in over 50 years. "The combination of low prices and high price volatility spells trouble." He said that these countries should liberalize their trade wherever possible, restore fiscal discipline, and create an environment more friendly to business in order to attract private investment. The World Bank reported that while rising energy prices contributed to global inflation by more than 2 percentage points in 2022 but felling prices in 2023-2024 helped moderate it. The report predicted that energy prices will fall by 17%, to the lowest level they have been in five years. They are then expected to drop another 6% between 2026 and 2026. Brent crude is expected to average $64 a barrel by 2025, a $17 decline from 2024, and $60 a bar in 2026, amidst abundant supply and declining demand. This is partly due to China's rapid adoption of electric cars, the largest auto market in the world. Brent traded at $64.80 per barrel in the early hours of Tuesday. As coal consumption in developing countries slows, the price of coal is expected to drop by 27% in 2025. Food prices will also be expected to fall, by 7% by 2025, and another 1% in the following year. However, this won't do much to alleviate food insecurity in some of those countries that are most vulnerable, as humanitarian aid is cut back and armed conflict fuels acute hunger. According to the World Bank report, gold prices will likely set a record in 2025 due to investors seeking safe havens in an uncertain world. However, they predict that price stabilization in 2026. (Reporting and editing by Andrea Ricci; Reporting by David Lawder)
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Minister says Pakistan is preparing to challenge India’s suspension of the water treaty
A government minister said that Pakistan was preparing to take international legal action against India for its suspension of an important river water-sharing agreement. Tensions between neighbours have been intensifying since the attack on tourists who were in India-administered Kashmir. Aqeel Makik, Minister of State for Law and Justice in Islamabad, said late on Monday Islamabad had plans for three legal options. One was to raise the issue with the World Bank, which is the facilitator for the treaty. He said that India was also contemplating taking action before the Permanent Court of Arbitration, or the International Court of Justice at The Hague to allege India had violated the Vienna Convention on the Law of Treaties of 1969. Malik stated that the legal strategy consultations were almost completed. He added that a decision would be made soon on which cases would be pursued. This would include more than one avenue. India's officials responsible for water resources did not respond immediately to a comment request. India suspended last week the World Bank-mediated Indus Waters Treaty of 60 after the attack on Kashmir. It said it would remain in place until Pakistan "credibly and irrevocably" abjures support for cross border terrorism. Islamabad has denied any involvement in the 26-person attack. India has said that two of the three attackers it has identified are from Pakistan. Islamabad said that "any attempt to divert or stop the flow of water belonging Pakistan... will be considered an act of warfare". Pakistan has also closed its airspace and suspended all trade with India. Two of the three wars that have been fought by these nuclear-armed neighbors since their independence in 1947 were fought over Kashmir. Both countries rule a part of it, but both claim full control. This agreement is for the distribution of water from the Indus and its tributaries that feeds 80% of Pakistani irrigated agricultural and hydropower. The treaty has been in place despite wars, and other periods of hostility between both nations. Malik said that Islamabad is considering a fourth diplomatic solution, which would be to bring the issue before the United Nations Security Council. He said, "All options are on table and we're pursuing all the appropriate and competent forums that can be approached." Malik said: "The Treaty cannot be unilaterally suspended and cannot be kept in abeyance. There is no (such) provision in the treaty." Kushvinder Voihra, recently retired chief of India's Central Water Commission, said: "There is very little (for Pakistan)." I can confirm that we have solid grounds to defend (India's action). Both government officials and experts say that India cannot immediately stop the flow of water, as the treaty only allows it to build hydropower plants on three rivers allotted to Pakistan without significant storage or large dams. Farmers, who are already suffering from water shortages due to climate change, have expressed concern. Reporting by Charlotte Greenfield, Islamabad. Additional reporting by Krishna Das, New Delhi. Editing by Raju Gopikrishnan.
Euro surgrise on Ukraine ceasefire proposals, tariffs squeeze stock
The euro reached a five-month-high on Wednesday, as Ukraine was ready to accept a ceasefire lasting a full month. Meanwhile, stocks were swayed by the back and forth of U.S. tariffs plans and concerns about an economic slowdown in the U.S.
European equity futures jumped by 0.8%, and FTSE Futures climbed 0.3%. This was after the U.S. announced it would resume military aid to Ukraine and share intelligence with Ukraine following Kyiv's acceptance of a U.S. proposed ceasefire.
Russia has not yet responded.
In New York, the euro reached its highest level since October at $1.0947. It remained steady at $1.0913 during the Asia session. Overnight, the Russian rouble reached a seven-month peak.
The broadest MSCI index of Asia-Pacific stocks outside Japan rose 0.2%. Markets in Hong Kong, China and Japan were all relatively stable. Japan's Nikkei held its ground after falling to a nearly six-month-low a day before.
Overnight, the S&P 500 was on the verge of a 10% drop from its record-breaking closing high in February. It ended a volatile session around 0.8% lower.
After Ontario suspended its plans to impose a surcharge for exported electricity, President Donald Trump threatened and then backtracked from a 50% increase in steel and aluminum tariffs against Canada.
Dollar has fallen, Treasuries are up and stocks have been selling at their highest level in months. Traders worry that tariffs and policy uncertainties will harm U.S. economic growth.
Catriona Burst, portfolio manager for a global fund with Wilson Asset Management Australia said: "He is clearly trying to rebalance back the economy in favor of America."
She said, "During this initial phase, when he is going hard, the environment in which you are operating is very dynamic."
The uncertainty created by the tariffs, and the back and forth on them, is preventing decision-making... the impact that this has on the short-term pocket of the U.S. as well as the growth in that country will be very interesting."
Travel stocks were hit after Delta Air Lines slashed its profit forecast by half, and rivals United Airlines and American Airlines warned about deteriorating results and falling government bookings.
Investors worried about the economy punished retailers with disappointing financial results. Dick's Sporting Goods shares plunged 5.7% after a gloomy outlook, and Kohl's Corp's shares fell 24% following a decline in sales.
Tariffs on steel and aluminum will be implemented later today.
The U.S. data on inflation for February will also be released, but it may still be too early to see the impact of tariffs.
The central bank meeting of Canada will be closely monitored to see how monetary policymakers in the frontline of Trump's Trade War are thinking. The market has priced in a seventh consecutive rate reduction, which was only a slight possibility two weeks ago.
Overnight, the Canadian dollar fell to a low of C$1.443 before rising back up to C$1.443. U.S. stock futures were largely unchanged.
The yen slipped from its five-month high, trading at around 148 dollars. The Australian dollar, which is sensitive to risk, was held at just below 63 U.S. Cents. Brent crude futures traded just under $70.00 a barrel. (Editing by Shri Navaratnam).
(source: Reuters)