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Gold prices fall as optimism about a ceasefire between Russia and Ukraine reduces demand for safe-haven gold.
The gold price fell on Tuesday as the slightly stronger dollar and optimism about a possible ceasefire between Russia, Ukraine and Ukraine reduced investor demand for safe haven assets. As of 0210 GMT, spot gold was down 0.4% to $3,215.31 per ounce. U.S. Gold Futures fell 0.5% to $3218.40. Dollars have recovered slightly after hitting a low of more than a week in the previous session. This makes gold priced in greenbacks less attractive to those who hold other currencies. Kyle Rodda, financial analyst at Capital.com, said that the initial shock of the U.S. downgrade has worn off. There is some hope for a truce to be reached between Ukraine and Russia. Donald Trump, the U.S. president, spoke to President Vladimir Putin Monday. He said that Russia and Ukraine would immediately begin negotiations towards a ceasefire. We are seeing buyers emerge when the price dips below $3200. "I think we're due for a larger pullback, particularly if geopolitical risk is further eased and we start to see yields rising from the U.S. fiscal policies." Rodda continued. Gold, which has been viewed as a safe investment amid geopolitical uncertainties and economic uncertainty, has reached multiple records this year. It is currently up by about 23%. U.S. Federal Reserve officials reacted cautiously to the implications of the latest downgrade in the U.S. Government's credit rating, and the unsettled markets conditions on Monday as they navigated a very uncertain economy. Moody's downgraded the United States' credit rating from "Aaa to "Aa1 on Friday. The company cited rising debt and interest rates "that are substantially higher than similar rated sovereigns". Later in the day several Fed officials will be speaking, which could provide further insight into the economy and central bank policy. The markets are currently pricing in a rate cut of at least 53 basis point this year. Spot silver dropped 0.3%, to $32.25 per ounce. Platinum rose 0.3%, to $1,000.71. Palladium fell 0.1%, to $973.74.
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Asian stocks are rising as traders consider US debt and trade deals
Asian stocks rose Tuesday, while U.S. Treasury rates steadied. This gave the dollar a little breathing room as investors weighed the debt burden of the largest economy in the world and waited for trade deals. Moody's downgraded its rating of U.S. sovereign debt last week due to growing concerns over that nation's $36 trillion in debt. This led to a sell-off on Treasuries Monday, but this stabilised during Tuesday's Asian trading hours. Kyle Rodda is a senior financial analyst at Capital.com. He said that the Moody's downgrade had only a short-term impact and was of little significance in the larger picture. "But we aren't really getting any fresh news to invest in... We haven’t received any new deals." Analysts say that markets struggle to find direction as there is little sign of trade agreements on the horizon. The 30-year bond rate was 3.5 basis point lower at 4,906%, after reaching a 18-month high 5.037% during the previous trading session. The major U.S. indexes recovered quickly from an early loss and ended mostly flat. The MSCI index for Asia-Pacific stocks outside Japan, which includes all shares traded in the region, is now 0.36% higher and hovering around the seven-month-high reached last week. Japan's Nikkei rose 0.65% early in the morning. Chinese stocks opened unchanged after the central bank cut lending rates benchmark for the first since October. Five of China's largest state-owned banks lowered their deposit rates as well. Hong Kong's Hang Seng Index grew 1%, while the blue-chip index rose by 0.15%. U.S. Federal Reserve officials reacted cautiously to the implications of Moody's downgrade, and the unsettled conditions in the market as they navigated an uncertain economic climate following the U.S.'s erratic trade actions. Although not an immediate issue for the Fed higher borrowing costs linked to a deteriorating U.S. Financial Position could make credit more expensive and cause restraints on economic activity. The U.S. Central Bank has cut interest rates twice this year compared to four times last month, when Donald Trump's tariffs shook the markets and caused investors to sell U.S. assets. Charu Chanana is the chief investment strategist of Saxo in Singapore. She said that for now, U.S. exceptionalalism and corporate resilience offsets risks. How long will it be before investors demand a higher premium for risk, with the Fed still in a wait-and see mode and trade negotiations seemingly stagnating? The markets will monitor a U.S. Congress debate on a tax law later that day. Trump is expected to attend the event ahead of the vote later this week. The measure would extend Trump’s 2017 tax cuts, and could add up to $5 trillion in national debt in the next decade. Investors are also watching for the Reserve Bank of Australia to make a decision on policy, as interest rate cuts are widely expected. The Australian dollar was slightly weaker, at $0.64485. Oil prices in commodities were mixed, as investors worried about a possible breakdown of talks between the U.S. & Iran over Iran's nuclear activities and the weakened prospect of Iranian oil entering the market. (Reporting from Ankur Banerjee in Singapore and Johann M. Cherian; Editing by Christopher Cushing).
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In the Pertamina case, Indonesia contacts trading firms in Singapore
It was announced on Monday that the Indonesian Attorney General's Office had contacted a number trading firms in Singapore about a corruption probe involving Pertamina. In the first half of this year, a number of Pertamina subsidiaries executives were arrested for alleged corruption in relation to oil imports from 2018 through 2023. This allegedly caused state losses of $12 billion. Pertamina apologized publicly and promised to improve the transparency after the arrests. Harli Siregar, a spokeswoman for the Attorney General's Office said that investigators want to speak with some Singapore trading firms about the case. Siregar stated that earlier attempts to summon these companies to Jakarta, whose names were not disclosed, failed. Therefore, the companies may be questioned in Singapore. Siregar declined to provide any further details. "These companies will also be questioned in order to gather more evidence for the ongoing investigation," he said. In response to an inquiry for comment, Fadjar Santoso, a Pertamina spokeswoman, said: "We respect and support the Attorney General's Office's investigation and law enforcement activities in accordance with the applicable regulations." Four sources familiar with the matter said that at least four trading firms have received a request to help with the investigation by Singapore's Corrupt Practices Investigation Bureau. They asked not to be named due to the sensitive nature. CPIB didn't immediately respond to an inquiry for comment. Bloomberg reported earlier that Singapore trading companies had been approached as part of the investigation. The Indonesian Attorney General's Office has said that it has interviewed hundreds of witnesses as part of the investigation.
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Sources say that RPT-Shanghai Exchange is looking to open up domestic nickel contracts to foreigners in this year.
Two sources familiar with the matter have confirmed that the Shanghai Futures Exchange is looking at opening its domestic nickel contract to foreign investors in this year instead of launching a new contract on its International Energy Exchange. ShFE has been exploring a more internationally-accessible nickel contract since at least 2023 as part of broader plans to build its global presence and challenge the dominance of rival the London Metal Exchange (LME). ShFE, according to industry sources, also wants to provide an alternative to LME Nickel after the trading disaster in March 2022. The LME contract had been suspended for eight consecutive days and left the industry without global benchmark pricing for the metal that is used in electric vehicle batteries and stainless steel. Two other attendees, who spoke on the condition of anonymity, said that ShFE will hold a two-day metals industry meeting in Shanghai this Thursday and Friday where nickel contract plans as well as other topics will also be discussed. The LME Asia Week, which concludes on Wednesday, is bringing together a large part of the global metals sector. Sources with knowledge stated that plans are being considered to open ShFE's existing domestic nickel contract to foreign institutional investors registered in China under the Qualified Foreign Institutional Investor Programme (QFII). QFII status allows the international market trade Chinese markets. A broker source told us that China has around 900 QFIIs. About 200-300 companies registered since September 2022 are primarily interested in commodities. In February ShFE opened a number of futures products, including stainless steel and petroleum fuel oil, to QFII Investors. When contacted by the reporter, a senior ShFE official refused to answer any questions about this topic. After hours, ShFE did't immediately answer questions sent by email. China Securities Regulatory Commission would have to approve any launch of domestic exchanges. According to a source familiar with its thinking, the commission has been encouraging exchanges to introduce international futures contracts in order to attract foreign investors. The market confidence was shaken by 2022, when the nickel price rocketed above $100,000 per metric ton. On March 8, the LME canceled all nickel trades for which the hedge fund Elliott Associates sued it. CME and ICE are also looking at cash-settled nickel derivatives, while Abaxx Technologies has launched a nickel sulphate contract this year.
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Perpetua Resources has received the final federal permit to develop Stibnite Gold Project
The U.S. Army Corps of Engineers has issued the final federal permit to Perpetua Resources for its Idaho antimony-and-gold Stibnite Project. In March, President Donald Trump used emergency powers to increase domestic production of vital minerals. This was part of an effort to counter China's near total control of this sector. The White House announced in April that it would expedite the permitting process for 10 mining projects throughout the United States as part of President Donald Trump’s efforts to increase critical minerals production. The Pentagon-backed project would be the first antimony mine in the country. Its estimated reserves are 148 million pounds, and the metal is used for bullets, tanks, flame retardants, and alloys in electric vehicle batteries. China is expected to account for almost 60% of global antimony production by 2024. The United States banned the export of the metal in December of last year. This has led to calls for increased domestic production. The project of Perpetua, which supplies copper, antimony, and other minerals, was given FAST-41 status. This is a federal initiative that launched in 2015 for streamlined approvals. "We think that the commitment of this administration to boost efficiency without compromising strict environmental standards could have a transformative impact on American mining," stated CEO Jon Cherry. The U.S. Army Corps has been involved in the interagency review of Perpetua’s Section 404 Clean Water Act permit application since 2017. It began formally evaluating Perpetua’s Section 404 Clean Water Act permit in 2023. The company stated that it will now focus on obtaining the state permits, and the project financing required to start construction. (Reporting and editing by Alan Barona in Bengaluru. Pooja Meon is based in Bengaluru.
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Treasury yields increase, dollar falls amid fiscal concerns following US downgrade
The dollar weakened on Monday as the yields of longer-dated Treasury bonds rose, amid worries about the U.S. government's debt and the tax cut bill following Moody's decision to downgrade the country's credit rating. The major U.S. stock indexes recovered early losses and ended the day in a flat or slightly higher range. Moody's Investors Service lowered the United States' sovereign rating to triple-A late on Friday night, underscoring the country's worsening fiscal outlook. A key congressional committee approved the massive tax-cutting bill of U.S. president Donald Trump on Sunday. Republicans in the U.S. House of Representatives, who currently control it, will push for the bill's passage this week. The yield on 30-year Treasury bonds reached a high of 18 months before reversing. Investors are concerned that tax bills will increase debt loads by more than expected. The 30-year bond rate rose 3.7 basis points, to 4.934%. It had previously reached 5.037% - the highest level since November 2023. The yield on the benchmark 10-year U.S. notes increased 3 basis points, to 4.469%. It had earlier reached 4.564%. What Moody's has done is more symbolic than anything. Peter Cardillo is the chief market economist of Spartan Capital Securities, a New York-based brokerage. Yes, the yields have risen in response to news reports... "But they're moving up also for other reasons," he said. "In general, the stock market (has) not really reacted all that much to Moody's' announcement. It's more of a market that has risen and is trying to consolidate recent moves. Moody's downgrade follows similar actions by Fitch and Standard & Poor's, both in 2011. Scott Bessent, the U.S. Treasury secretary, used Sunday's television interviews to dismiss this downgrade. Several Federal Reserve officials commented on the U.S. market on Monday following the downgrade. John Williams, New York Fed president, said that investors were "clearly weighing" their options at a Mortgage Bankers Association conference in New York. He said that investors still see the U.S., "including Treasuries and fixed income assets" as a "great place to invest." The Dow Jones Industrial Average rose by 137.33, or 0.32 percent, to 42.792.07. The S&P 500 gained 5.22, or 0.09 percent, to 5,963.60, and the Nasdaq Composite increased by 4.36, or 0.02 percent, to 19,215.46. On Friday, the S&P 500 posted its fifth consecutive day of gains. MSCI's global stock index rose by 1.77 points or 0.20 percent to 882.39. The pan-European STOXX 600 rose 0.13% while Europe's broad FTSEurofirst 300 rose 2.80 points or 0.13%. MSCI's broadest Asia-Pacific index outside Japan fell by 0.5%. A mixed bag of Chinese economic data revealed a struggling economy. The U.S. Dollar fell, reaching a low of more than a week against the safe haven currencies, including the yen and Swiss franc. The dollar fell 0.55% against the Japanese yen to 144.82. Trump's tariffs war has weakened consumer sentiment. Analysts will be looking at Home Depot and Target earnings this week to get an update on trends in spending. Home Depot will report Tuesday morning before the opening bell. Trump said that Walmart would be forced to raise prices because of the levies if it didn't "eat the tariffs". Raphael Bostic, Atlanta Fed president, told CNBC Monday that the central bank might only be able reduce interest rates by one quarter point for the remainder of the year due to concerns over rising inflation caused by increased import taxes. The Group of Seven Democracies' finance leaders will try to show unity this week when they meet on topics other that Trump's tariffs. These include economic security, Ukraine, and artificial intelligence collaboration. The oil price ended up slightly higher, as the Moody's downgrade was offset by signs of an impasse with Iran in U.S. nuclear talks. Brent crude futures increased 13 cents, settling at $65.54 per barrel. U.S. West Texas Intermediate crude increased 20 cents, settling at $62.69 per barrel. Gold prices rose, with spot gold rising 0.9% to $3,229.51, while U.S. futures gold settled 1.5% higher, at $3233.5.
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State AGs oppose legal shield for Carrier Global during bankruptcy of PFAS
Seven U.S. States on Monday objected against the bankruptcy plan of fire protection company Kidde-Fenwal, claiming that it improperly tries to shield its owner Carrier Global's from lawsuits relating to toxic PFAS chemical in its firefighting products. Carrier, not bankrupt itself, is trying to use Kidde-Fenwal bankruptcy to avoid its separate responsibility for suits over the "forever chemicals", in a manner that violates the U.S. Supreme Court's precedent. Carrier had previously agreed to pay Kidde-Fenwal $540 million and its creditors in a Chapter 11 plan to settle lawsuits brought by local governments, businesses and individuals who claimed that Kidde-Fenwal’s firefighting products contaminated soil and drinking water with PFAS around airports and military base bases throughout the U.S. According to two objections from the Democratic Attorneys General of New York and California, Connecticut, Delaware Maine, Vermont, Connecticut, Delaware and the District of Columbia, this deal cannot be used as a way to prevent states from suing Carrier directly for the alleged PFAS pollution. The plaintiffs cited a Supreme Court decision last year in the bankruptcy case of Purdue Pharma that severely curtailed a court's power to dismiss legal claims against entities who have not declared bankruptcy. Carrier didn't immediately respond to an inquiry for comment. Kidde-Fenwal declared bankruptcy in May 2023 after being named a defendant in over 4,400 PFAS suits over its chemical firefighting products. The first to file for bankruptcy as a result PFAS litigation was Kidde-Fenwal. However, experts believe that other companies may follow. Per- and polyfluoroalkyl chemicals, or PFAS for short, are a grouping of approximately 15,000 chemicals that have been used in hundreds consumer and commercial products, including firefighting sprays, nonstick pans and clothing, and cosmetics. Kidde-Fenwal’s bankruptcy plan doesn’t explicitly include the "non-debtor release" type of clause that was ruled unconstitutional by the Supreme Court in 2017. It characterizes PFAS liability instead as "estate claims," a type legal claim that Kidde-Fenwal may bring against its parent and that only Kidde-Fenwal bankruptcy estate is allowed to settle or litigate. The states argued Kidde-Fenwal’s plan uses "word games" in order to "obscure reality" about the settlement. This will prevent creditors from suing Carrier for PFAS contamination. The state said that Carrier is "vastly liable" for contamination which poses significant and persistent health risks to humans and the environment. New York, as an example, stated that Kidde-Fenwal chemicals contaminated soil and drinking water in approximately 35 places. According to the objection, the state has spent over $100 million on remediating the contamination. The ongoing costs are more than $3,000,000 per year. Carrier is a company that sells heating, cooling and refrigeration services. It has a $64.8 billion market capitalization. Kidde-Fenwal plans to divide Carrier's $540-million contribution, as well as future insurance recoveries, and other assets among PFAS creditor groups. Kidde-Fenwal proposes a bankruptcy plan that would give states 30% of settlement funds, local providers 30% and individuals with injury claims 22%. Smaller amounts would be reserved for firefighter's training, airports, businesses and landfills. Kidde-Fenwal intends to begin soliciting creditor votes for its Chapter 11 plan in June. Kidde-Fenwal sold its assets earlier to the private equity firm Pacific Avenue Capital Partners. In the U.S., water providers have reached settlements with large companies in their PFAS litigation. These include a $10.3-billion settlement with 3M, and a $1.1-9 billion settlement with DuPont Chemours Corteva. Kidde-Fenwal Inc., U.S. Bankruptcy Court District of Delaware No. 23-10638. 23-10638. Brian Glueckstein of Sullivan & Cromwell and Justin DeCamp from Sullivan & Cromwell are representing Kidde-Fenwal. David Molton, Brown Rudnick Click here to read more Carrier reaches $730 mln settlement over fire protection unit PFAS claims Kidde-Fenwal, a fire protection company, files for bankruptcy citing PFAS suits Are you the next defendant in the growing litigation over "forever chemicals"? EPA will roll back 'forever chemicals' rule and extend timelines. (Reporting from Dietrich Knauth, New York).
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The 'Choose France Summit' brings new investments of 20 billion Euros
The "Choose-France" business summit this year is expected to bring in 20 billion euros ($22.47billion) in new investments, said French President Emmanuel Macron. He announced projects in defence and energy, industry, as well as artificial intelligence. Macron's efforts to win over international business leaders by making the Choose France Summits at the Palace of Versailles an absolute must for the corporate elite have been credited with a change in investor perceptions of France, which was previously perceived as having a rigid, high-tax economy. Macron announced that in addition to the 20 billion euro in new investments, he also pledged 20 billion dollars in AI-focused projects at a Paris AI Summit in February. "You have delivered a lot in terms of investment in various fields, including AI, telco... green hydrogen and circular economy... This is a complete edition, where 20 billion was invested. And 20 billion in AI as a follow-up of the summit held in February," Macron said to CEOs and entrepreneurs at Versailles. The U.S. logistics company Prologis has pledged to invest 6.4 Billion Euros in four data centers in the Paris area. Meanwhile, London-based Fintech Revolut will invest 1 Billion Euros over the next 3 years to expand in France, and will also apply for a French bank licence. A similar announcement was made by the United Arab Emirates AI-focused MGX Fund. Other companies, including Amazon and Britain's Less Common Metals Limited were also expected to make an announcement in the rare earths sector. The Elysee announced that Portuguese company Tekever would build a drone manufacturing factory in the Southwest, a 100-million euro investment. Macron's government faces pressure to stop a wave job losses in the industry as trade policies of U.S. president Trump put further pressure on Europe’s faltering economy. Macron stated that "we must invest more in AI, green technology, defense, and security because we are racing to the finish line." According to EY’s European Investment Monitor (an annual survey of thousands business leaders), France has been Europe's top recipient of international investment for the last six years. Macron's advisors have used this as proof that his supply-side reforms are working. This year's edition shows that the number of projects in Europe has decreased for the second year running, while the United States saw a five-fold increase between 2023-2024. EY said this reflected the appeal the Inflation Reduction Act package of subsidy and Trump's business-friendly promises. Macron, despite the huge foreign investment into France, has not stopped French companies from investing abroad. Sanofi's plans to invest at least $20 billion in the United States to boost manufacturing angered French politicians.
Trump tariffs and economic uncertainty fuel further settlements between CEOs, activists
Yeti Holdings shares fell in December, and then again in March after President Donald Trump threatened to impose tariffs on China. The company's factories were located in China.
Yeti, the Austin-based manufacturer of $300 coolers and travel mugs for $40, faced another problem behind the headlines.
According to sources familiar with the discussions, Engaged Capital pushed management to return cash back to shareholders, expand to new geographies and be more transparent to investors. The hedge fund predicted that these changes could help Yeti's shares triple in the next three year.
Faced with market volatility and concerns over consumer demand Yeti and Engaged reached a settlement. This ended a potentially messy dispute and lifted the shares by nearly 6% on that day. Yeti declined to comment on the matter.
According to a dozen analysts, investors, lawyers and bankers, the peace at Yeti is a part of an increasing trend, as corporations and their activists decide to find common grounds amid the prospect of a tariff battle, mass layoffs in U.S. Government agencies, and the growing threat of a possible recession, which is weighing down on stock prices and clouding business outlooks.
Barclays reports that 29 global companies settled their claims in the first three months of this year, a jump of 32% from a similar period last year.
Duncan Herrington is a managing partner of consulting firm Jasper Street Partners. He said, "If the uncertainty in the market continues, there will likely be more settlements as fewer disputes are likely to end up in a vote."
Another recent settlement was with the cybersecurity company Rapid7, which agreed to add three additional directors. Consumer health company Kenvue settled with Starboard Value. The company is known for household brands like Band-Aid, Tylenol and Tylenol.
Bankers and lawyers have been told by corporate chiefs who recently navigated through the Covid-19 pandemic that they should remove distractions such as board fights in order to focus on running their businesses.
Lawrence Elbaum is the co-head Vinson & Elkins shareholder activism practice. He said that many companies want to remove risk from their business so they can concentrate on it. "Activists are also suffering because their returns have been hammered, so they want quick settlements."
It is true that big board fights continue at U.S. Steel and Phillips 66, as well as Autodesk. This shows it's too early to declare peace in corporate America. Both sides show flexibility and a willingness to reach a settlement.
Herrington, of Jasper Street, said that people are now more willing to cooperate.
Activists, who used to try to get their founders onto boards, are less adamant about securing a seat on the board for themselves. Bankers and lawyers say that more boards will consider candidates suggested by activist investors if the candidate has deep industry expertise.
People familiar with the selection procedure said that Engaged Capital wanted Yeti's product offering to be expanded, so they introduced Arne Arens to management. Arens is now the director of the company. He has clothing industry expertise.
Many activists have lost money in the past year, so they are less likely to continue a costly, uncertain battle.
"You need to calculate your chances of winning a fight," said Lyndon Park who is the CEO of ICR Shareholder Advisory. If both parties are willing to compromise, then a settlement will not be a loss. (Reporting and editing by Dawn Kopecki, Edward Tobin and Svea Herbst Bayliss)
(source: Reuters)