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Brazil's vast forest is managed by "conservation mosaics".
Brazil has 40% public natural areas The "mosaics", or contiguous conservation units, are grouped together. Regional policies are articulated by local governments, NGOs and communities By Andre Cabette Fabio Borges, speaking on her porch near the Negro River in Ecuador, said that her company, Yara Amazonas has partnered with loggers so they can extract oil and seeds from the forests instead of cutting down trees. Yara Amazonas, a sustainable initiative within the Lower Negro River Mosaic of Protected Areas (a group of 14 Conservation Areas established between 1980 and 2018 covering an area greater than Ireland), is one of dozens in the Lower Negro River's mosaic of protected zones. Henrique Pereira is a professor of the National Institute of Amazonian Research. He said that the federal government created the mosaic system to help manage natural reserves which overlap or are contiguous. The councils of Brazil's 27 Mosaics are made up of members from the community and administrators at the federal, state, and municipal levels. They help to fight land-grabbers and loggers as well as illegal farmers and they allow funds to trickle to initiatives on the grounds. In Brazil, the management of public areas is a massive task. From national parks with strict rules that prohibit people from living there to Indigenous territories and settlements, for sustainable development. According to a government assessment of 2024, these areas cover about 40% of the nation's land, an area bigger than India. They are governed under a variety rules and jurisdictions. Brazil is preparing for the COP30 U.N. Climate Change Conference in the Amazonian city of Belem, in November. This will raise expectations about new funding and actions to protect Brazil's natural environment as well as help communities. Brazilian authorities claim that a severe drought in Amazon has contributed to food insecurity. Wildfires also played a significant role in the record-breaking global forest losses last year. Scientists claim that deforestation compounds the effects of climate changes, and threatens to transform large areas of Amazonia into drier ecosystems. Marcos Pinheiro said that the mosaic councils help members to exchange information and gain strength in order to make conservation efforts effective on the ground. Puranga Conquista, an 86,000 hectare area that forms part of the Lower Negro River mosaic, is home to over 800 families. From Manaus, the capital of Amazonas state, where the Lower Negro River Mosaic can be found, take an hour-long trip on the Negro River. The river is flanked by lush jungle and a few wood houses. Settlers receive land in batches and can cultivate crops, harvest seeds, fish and fruit, or extract timber and wood under strict environmental regulations and a community-agreed plan. LAND RIGHTS IS KEY It hasn't always been like this. Puranga Conquista, when it was first protected by the government in 1995 was classified as a part of state park. Human settlement was also banned. Francisco Borges, Elisangela’s father and member of the Mosaic’s Council, said that people who lived there for years could have been evicted. In 2000, with the support of other mosaic members, the community launched a campaign that was successful in 2014, persuading the authorities to reclassify this area as a reserve for sustainable development, so the people could continue living there. Francisco Borges said, "A request from the council of the mosaic is more powerful than one from a single reservation." After communities successfully lobbied for an area to be recognized as a sustainable settlement, the Lower Negro River Mosaic has gained 580,000 additional hectares in 2018. Securing communal land rights, say environmentalists, is crucial to stopping deforestation. It discourages people clearing public forests and using the land for private farms. The Amazon Fund is an international mechanism that supports projects to stop and reverse deforestation. It has funded production by Yara Amazonas, and three workshops where local Indigenous people produce handicrafts. The Lower River Negro Mosaic also includes numerous other initiatives, such as youth groups, fire brigades and furniture workshops, in addition to preserving turtle populations. POLITICAL HEADWINDS These initiatives haven't always been backed by the political establishment. Pinheiro from REMAP said that many conservation mosaics helped communities to engage in territorial protection even during political turmoil. The far-right Brazilian government led by President Jair Bolsonaro saw a significant increase in deforestation between 2019 and 2022 as they dismantled their environmental policies. The Lower River Negro Mosaic Council continued to operate under the radar. Pinheiro explained that "they understood that it was just a passing storm, so everyone kept quiet." However, the political challenges have not disappeared. A bill that will loosen the rules for environmental licensing is currently being debated in parliament. Brazil's powerful agribusinesses are in favor of the change. However, environmental NGO Instituto Socioambiental says it will allow developers to ignore the impact of road, rail, hydropower dams, and other projects on areas protected. Elisangela Borges stated that Brazil has vast potential for development, but it can be done without harming the environment.
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EU advisors warn against lowering new climate goal
Independent advisers to the European Union have warned against lowering the planned climate goal for 2040, while EU officials are considering a softer target in order to curb a political backlash towards ambitious environmental policies. In July, the European Commission will propose a legally-binding target for EU countries to reduce their emissions by 90 percent by 2040 compared to 1990 levels. Brussels, however, is considering options to overcome the pushback of governments. These include setting a lower goal for domestic industries and using international credits to bring up the gap. The European Scientific Advisory Board on Climate Change, or ESABCC, warned against this strategy, saying that it could divert funds from investments into European industries and infrastructure. In an analysis of 2040's target published on Monday, the ESABCC stated that using international carbon credits, even partially, would undermine the creation of domestic value by diverting resources away from the transformation needed in the EU economy. A spokesperson for the Commission did not respond immediately to a comment request. Carbon credits are a way for EU countries to buy credits from projects abroad that reduce CO2 emission - such as forest restoration in Brazil. These credits can then be used towards the EU's goal. These credits, say their supporters, are an important way to raise money for projects that reduce CO2 emissions in developing countries. Some EU officials remain cautious. In 2013, the EU banned international credits on its carbon market after an influx of cheap credits that had weak environmental benefits led to a crash in carbon prices. Despite geopolitical challenges, looming U.S. Tariffs and high energy costs, the ESABCC has said that it will stick to its 2023 recommendation, that the EU agrees to a 90%-95% reduction in greenhouse gas emission for 2040 – which it says is achievable and in accordance with global goals in order to avoid worse climate change. It would be necessary to have a power sector that is almost entirely free of emissions by 2040, and electrify industries that pollute. They said that this would have many benefits, including fewer pollution-related illnesses, a boost in investments for modernising industries, and improved security, as Europe will be less dependent on fossil fuels imported. (Reporting and editing by Kirsten Doovan; Kate Abnett)
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Venezuela increases taxes on the private sector after Chevron's exit
Business leaders and analysts predict that Venezuela's government will increase taxes and charges for public services on the private sector in order to compensate the decline of oil revenues after the tightening of U.S. Sanctions. Washington canceled in February key licenses that allowed a few partners and customers of the state oil company PDVSA to export Venezuelan crude oil under U.S. sanctions exemptions. The United States also imposed secondary duties on Venezuelan oil buyers. Analysts estimate that these actions could reduce OPEC's oil revenue, which is estimated to be around $15 billion by 2024, approximately 30%. A dozen businesspeople said that the government has reacted to this anticipated revenue loss by requiring advance tax payments, conducting more audits and imposing significant fines. It also allows local authorities and providers of public services to increase their fees. These measures put pressure on a private sector that has been struggling with economic crisis for years, high inflation and currency controls. Requests for comments were not responded to by the Finance Ministry, Communications Ministry or Tax Agency. In January, President Nicolas Maduro had asked officials to double the tax revenue from $5.2 billion in last year. Tax revenues increased by around a fifth during the first quarter. Maduro’s government has rejected U.S. Sanctions, calling them an "economic War". Three sources claim that businesspeople have met with the government to try to get some taxes revised. In a survey conducted by Conindustria in May, which represents food, chemical, plastics, and textile producers, 77% of respondents cited the tax burden as their primary obstacle. Around 60% of those who responded to the survey plan to increase production little or no in the next few months. Luigi Pisella said that any additional taxes paid would come out of the working capital. He said that the tax base should be broadened to prevent the burden being concentrated on existing businesses. One industrialist who requested anonymity said, "Those who are able to manage a little bit of growth can manage this adverse climate." LIFESAVER Jose Vielma, a member of the ruling party, praised the increase in tax collections. Vielma said that a higher tax revenue has allowed for the economy to be able to recover from difficult times. "We owe the private sector a debt of gratitude for its contribution." Analysts are more direct. Luis Barcenas is an economist with the Venezuelan company Ecoanalitica. He said, "Taxes save lives for governments." The firm estimates that the tax revenue could reach $13 billion in this year, and that businesses are dedicating half of their earnings to paying taxes. Conindustria's survey revealed that larger companies do not anticipate an increase in jobs. However, medium-sized businesses said they may reduce their headcount by 1%. One businessman said, "When you lack working capital you can't create jobs." Some sources, particularly from the retail industry, have said that they are closing down stores due to lower sales. A businessman in central Venezuela said that municipal taxes also have a significant impact on the prices. Local manufacturers often have factories in multiple municipalities, which means they are subject to higher local taxes than the few international companies that remain in Venezuela and import products or only have limited factories within the country. The director of an unnamed foreign company said that the impact was even greater for companies with local production. According to the Venezuelan Finance Observatory, the Venezuelan Finance Observatory, the Venezuelan Finance Observatory, the Venezuelan Finance Observatory, the Venezuelan Finance Observatory, the prices of the outage-prone services have doubled since March. By 2025, inflation, which was 48% last year, is expected reach 200%. Christian Plumb, Nia Williams and Christian Plumb are responsible for the reporting.
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Dollars slide on trade and tax concerns
As June began, the U.S. Dollar plunged to its lowest level since six weeks. Concerns about U.S. Tariffs were back in the spotlight after the legal confusion of last week and rising military tensions around the world. The euro was the leader, unfazed by the prospect that the European Central Bank would cut interest rates again on Thursday. The new German chancellor Friedrich Merz will visit Washington on Thursday to meet U.S. president Donald Trump as trade negotiations between Europe and America continue to be closely watched. The dollar is susceptible to fears of foreign capital flight as markets are still concerned about the U.S. Fiscal Bill that is currently being debated in the Senate. This bill gives the administration the ability to tax companies and investors who come from countries with 'unfair' foreign taxes. On Monday, the focus was back on tariffs. It seemed that President Donald Trump would push for levies in some way despite last week's legal opposition. After the weekend, Trump's plan of doubling duties on import steel and aluminum from Wednesday to 50% hit the greenback as Beijing retaliated against allegations that it had violated an agreement regarding critical minerals shipments. The weekend was marked by geopolitical tensions of great importance and bellicose threats. Gold rose. Pete Hegseth, the U.S. Secretary of Defense, warned his Indo-Pacific allies on Saturday to increase their spending on defence. Ukraine-Russian war continues to rage. Ukrainian drones continue to strike dozens of Russian aircraft deep within Russian territory. Gaza's conflict is not ending. The major countries are building weapons at a rapid pace. Britain is expanding its fleet of nuclear-powered attack subs as part a review of defence, aimed at preparing the country for modern warfare and countering the Russian threat. The oil price rose by about 3% Monday, after the producer group OPEC+ maintained its output increase in July at the level of the previous two month. There was some good news on the interest rates front in a week that saw a lot of data from the U.S. Labor Market. Federal Reserve Governor Christopher Waller stated on Monday that further rate cuts are possible in the second part of the year. Waller said that since the rise in inflation pressures linked to Trump's increased import taxes is unlikely to persist, he supports looking past any tariff effects to near-term-inflation in setting policy rates. As expected, China's manufacturing sector shrank in May for the second consecutive month. After Karol Nawrocki, the nationalist candidate of the opposition won the second round in the presidential elections, stocks in Poland fell by 1.4%. Before Monday's bell rang, U.S. stocks futures were down by about half a percentage, and so too were stocks in Europe, Japan, and other parts of the world. The yields on U.S. Treasury bonds have risen again. The column today looks at this week's major monetary decision made in Europe. It is widely expected that the European Central Bank will lower rates for an eighth time during the cycle, but the euro has risen regardless. EURO CONUNDRUM: ECB FACES SURGING EURO DISCONNORDRUM The euro continues to rise while the European Central Bank is cutting rates. This is because a capital reversal in the US has thrown off the relative rate shifts, and could force the ECB to further ease. It is expected that the ECB will lower its main lending rate to 2% on Thursday, which would be half of what it was a year ago at its highest point and less than half of the Federal Reserve's equivalent. The central bank has also returned to a level it considers to be 'neutral,' meaning that the rate does not either stimulate or rein in the economy. For the first time since almost two years, real, or inflation adjusted, ECB interest rates will return to zero. It's amazing that the euro, after eight consecutive ECB rate cuts and the prospect of zero real rates or even negative ones in the future, has risen more than 10% against a dollar basket and 5% against a currency basket based on the major trading partners of the Euro Zone. The nominal effective euro index has reached record levels, while the "real" version is at its highest level in over 10 years. The euro/dollar rate has risen despite no change in the difference between the yields of two-year government bonds on either side. This is usually a reliable indicator for changes in the exchange rate. This trend is largely due to Donald Trump's trade wars, the fear of capital flight out of dollar assets because of a variety of concerns regarding U.S. institutions and policies, and Germany's historical fiscal boost. The ECB is in a quandary if, as many believe, even a fraction (or fractions) of the trillions dollars of European capital invested in the United States are indeed returning home. How can it manage both the deflationary and domestic demand effects of a currency increase that is so rapid? The euro is not affected by the possibility of future rate cuts. The majority of ECB observers expect one or even two more rate cuts after Thursday, while money markets are predicting a 'terminal' rate of around 1.75%. This is the low end in the ECB range estimated as 'neutral. If the majority of capital repatriation is from equity investments in the U.S., lower ECB interest rates could even increase the outflows by boosting growth prospects for cheaper European stocks. Higher borrowing in Germany and across Europe should also sustain fixed income returns over the long term, increasing the pool of "safe" investments. 'GLOBAL EUROMOMENT' The ECB may protest about 'excessive gains' in the euro, but the impact could be limited unless they are prepared to back up their words with actions. There is also a chance that it could backfire because of the reasons mentioned above. The ECB is encouraging investment and the euro as a currency of reserve, in part, to meet the massive capital requirements for retooling the military, digital, and energy sectors. Christine Lagarde, ECB head, said in a speech last week in Berlin that there is an opportunity for a global euro moment, where the single currency can be a viable alternative to dollars, bringing immense benefits to the region if the governments are able strengthen the financial and security infrastructure of the bloc. A soaring currency rate during a trade conflict may seem like a good thing, but it will cause some concern among the major exporting countries in the region. ECB hawks, doves, and others will have to decide whether the continued easing of monetary policy to counter disinflationary risks is only stoking domestic inflation in the long run. Not to mention the fiscal boost that's coming next year. It is clear that the ECB will take into account in its new economic projections, due to be released on Thursday, the 7% increase in the euro/dollar rate and the near 10% decline in the global oil price since the last set of forecasts made in early March. Morgan Stanley economists believe that even if central bank raises core inflation forecasts, headline inflation could still fall short of the 2% target between mid-2025 and early 2027. This is even though the GDP growth outlook for 2025 has been revised upwards. At this point, it is impossible to make any predictions. Few central banks or major traders have any idea where the U.S. trade war or tariffs will lead. The ECB is unlikely to be able to cap the Euro, as global trade and investments are a source of anxiety. The ECB is faced with a big dilemma: whether to maintain the status quo or ease up even further. The chart of the day shows how tariff-related import distortions have distorted U.S. Gross Domestic Product readings this year. Last week, models that track GDP inputs were again jarred when a sharp contraction of the goods trade deficit in April occurred as the front-running imports to beat the tariffs in the 1st quarter faded. According to the Census Bureau of the Commerce Department, with many tariffs in effect, imports plummeted, helping to reduce the goods trade surplus by 46%, to $88 billion. Imports dropped $68 billion, to $276 billion. Exports rose $6.3 to $188.5. If the goods deficit shrinks, the net trade component in GDP calculations could spur significant growth in this quarter. It is similar to how it reduced Q1 GDP by a record-breaking 4.9 percentage points. The Atlanta Federal Reserve’s ‘GDPNow’ tracker is now boosted by the trade figures. It sees an impressive 3.8% real GDP increase in Q2. There is still caution. There is caution. Businesses don't appear to be restocking. Wholesale inventories were unchanged last month, and retail stocks fell by 0.1%. Stockpiles are expected to drop dramatically over the rest of the quarter. Watch today's events * US manufacturing surveys for May from S&P Global and ISM (0930EDT), as well as April construction spending (1000EDT). * Federal Reserve chair Jerome Powell opens Fed event in Washington. Fed Board Governor Christopher Waller and Dallas Fed President Lorie Log speak. Chicago Fed President Austan Gollisbee also speaks. Bank of England policymaker Catherine Mann also speaks. * US corporate earnings: Campbell's The opinions expressed are solely those of the authors. These opinions do not represent the views of News. News is committed to the Trust Principles and therefore, integrity, independence and freedom from bias.
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US copper futures rise as tariff fears loom
U.S. Copper Futures soared by nearly 6% Monday, increasing their premium over London Prices amid growing speculation about new import tariffs after President Donald Trump’s latest aluminum trade measures. Trump announced on Friday that he would increase the tariffs on steel and aluminum imports to 50%, up from 25%. U.S. Comex Copper Futures rose 5.7% to $4.9175 a pound. This is the highest price since April 3. The benchmark three-month copper price on the London Metal Exchange rose by 1.1% at $9,597.50 a metric ton as of 0944 GMT. The COMEX premium over the LME, a global benchmark price, has widened from $759 per ton to $1,231 a ton on Friday. Tom Price, Panmure Liberum analyst, said: "Although the word copper was not mentioned in Trump's announcements last week the markets have clearly priced in the possibility of tariffs after the February investigation. This shows the strong demand for the metal from investors." In February, Trump launched a probe to determine whether new tariffs could be imposed on imports of copper, a critical metal for electric vehicles, military equipment, and semiconductors. LME aluminium remained steady at $2.443.50 per ton after having touched its lowest level in May at $2.425.50. The U.S. Midwest Aluminium Premium jumped 54% since Friday, to $0.58/lb ($1,279 per ton). Goldman Sachs said in a report that the U.S. Midwest Aluminium Premium would increase to $0.68-0.70/lb if higher metals tariffs are implemented and remain in place. Lead increased by 0.9% to $1975, Zinc gained 1.7% at $2,663.50. Tin rose by 0.8% to $30,600, and Nickel was up 0.9%, to $15,365. The softer dollar made metals more accessible to holders of other currencies. Neil Welsh, Britannia Global Markets' head of metals, explained that the Dragon Boat Festival in China was responsible for the low Asian participation on Monday. Reporting by Ashitha Shivprasad from Bengaluru, and Polina Deitt in London. Editing by Kirby Donovan.
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The US beef market could be affected by the presence of flesh-eating worms in cattle
Experts say that the New World Screwworm is a parasite that has been eating cattle and wild animals alive for years. It is now moving northward from Central America towards Mexico, and it has surpassed biological barriers which had kept this pest in check for decades. Washington stopped cattle imports in May due to the spread of the insect into Mexico. This was about 700 miles away from the Texas border. The U.S. herd is already at its lowest level in decades, and the closure of the border could increase beef prices to record levels by preventing more calves from entering the U.S. supply. What is New World Screwworm? Screwworms, parasitic flies that lay their eggs in the wounds of warm-blooded animals. Usually, wild and livestock animals are the victims. After hatching, screwworm larvae burrow into living flesh with their sharp teeth. They feed, increase the size of the wound, and can eventually kill their host without treatment. A tiny scratch, a brand that has recently healed, or an ear tag that is healing can become a large wound covered with maggots, which puts the whole herd at risk. Researchers began releasing large numbers of male screwworm flies in the 1960s, which mated with wild female screwsworms and produced infertile eggs. Why is this important to U.S. customers? Every year, the U.S. imports more than a million beef cattle from Mexico. The suspension of imports will probably contribute to higher beef prices, as it will tighten the supply after ranchers were forced to reduce their herds due to drought. Experts said that the U.S. price of beef was likely also boosted by a separate suspension in imports from Mexico due to screwworms, which lasted between November and February. The upward pressure on prices is expected to continue through summer grilling. Experts say that Mexican cattle are typically fed and fattened in the United States for five to six month before slaughter. A reduced slaughter rate could increase beef prices. Even though the fly is thousands of miles from the border, an outbreak in the U.S. could further restrict the cattle supply as well as put household pets and other livestock at risk. Dr. Timothy Goldsmith is a professor of veterinary medicine at the University of Minnesota. He said that screwworms can feed on humans. Goldsmith explained that homeless people are more susceptible to infestations because they often sleep outdoors and lack access to hygiene and medical products. What steps are being taken to contain the outbreak? One factory in Panama that breeds and sterilizes screwworms releases 100 million sterile fly every week. But experts say there are more factories needed to stop the spread of this fly north. Sonja Swiger is an entomologist from Texas A&M University. She said that screwworms can't fly much more than 12 miles, but when they burrow inside their hosts, they can travel a great distance. In Panama and Mexico the flies are already past the narrowest land stretches, so it is necessary to release a large number of sterile flies to stop the outbreak. The U.S. Department of Agriculture (USDA) announced on Tuesday that it will invest $21,000,000 to convert a fruit flies factory in Mexico into a facility for the production of sterile screwworms. The agency stated that the border would likely be reopened to cattle imports before the end of this year. What could be the impact on American cattle ranchers if this happens? According to the USDA, a screwworm epidemic in Texas would cost $1.8 billion due to livestock deaths, costs of labor and medication. Most cattle ranchers are no longer equipped to diagnose or treat screwworm after decades of eradication. Treatment involves the removal of hundreds of larvae from wounds and thorough disinfection. This is a laborious, expensive and time-consuming process. This is a pest that we do not want to see again. David Anderson, a livestock economist at Texas A&M University, said that this was a bad situation. I can't even imagine dealing with it. It's gross." Reporting by Heather Schlitz. (Editing by Emily Schmall, David Gregorio and Emily Schmall)
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Tunisian national killed by neighbor in south of France
The Draguignan prosecutor announced in a press release that a Tunisian citizen was killed by his neighbor in the south France. He added that the incident is being investigated as an act of racial violence. The victim was shot dead late Saturday night, in Puget-sur Argens. He was described as "possibly" 35 years old, but his identity has not yet been confirmed. The man also shot a 25-year old Turkish national in the hand and took him to hospital. This incident occurs one month after Aboubakar, a 22-year-old Mali man, was fatally stabbed in a mosque of the southern French town of La Grand-Combe. Racism is on the rise in France. According to data released in March, the French police reported an increase of 11% in the number of racist, xenophobic, or anti-religious offenses in 2013. In a late Sunday statement, the prosecutor revealed that the 53-year old suspect was a sports shooter. The prosecutor said that he had posted racist and hateful content on his social networking account both before and after he killed his neighbor. France is home to the largest Muslim community in Europe. Its 6 million Muslims make up 10% of its population. Across the political spectrum, politicians, including President Emmanuel Macron have attacked what they call Islamist separatism, in a manner that rights groups say stigmatizes Muslims and amounts discrimination. (Reporting and editing by Kate Mayberry; Layli foroudi)
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ADNOC reduces Murban export forecast from August 2025 through May 2026
The company stated that Abu Dhabi National Oil Co. (ADNOC), has reduced its monthly forecast for Murban oil from August until next May in order to increase the processing at its refinery. ADNOC's August export forecast for the light Murban grade is 1.705 millions barrels per day, according to a report published by the company on Saturday. This is 65,000 bpd less than the previous forecast of 1.77 million. ADNOC has also reduced the forecast from September 2025 through May 2026, by between 100,000 and 177,000 bpd. However, forecast volumes for July and June 2025 remain unchanged. In the report, ADNOC said that the reduction was mainly due to feedstock optimization and increased Murban processing in its Ruwais facility. Murban exports were increased by the company as a result OPEC+ production increases which pushed crude prices down. The OPEC+ group, which includes the Organization of Petroleum Exporting Countries (OPEC) and its allies like Russia, has agreed to raise production by almost 1.4 million bpd from April to July.
Gold's current rally - echoes from the 1980s, but with a more durable core
Gold's recent gallop to record highs has drawn comparisons to the 1980s, when political and economic turmoil was the primary driver of record prices. Market players, however, say that the nature of this rally and its potential ability to last is different.
Analysts say that with tensions high between historical allies due to U.S. trade tariffs, wars in Ukraine, and Middle East, it is unlikely that they will come together quickly to resolve issues that are driving the interest in gold as a safe haven.
HSBC analyst James Steel noted that the metal's recent surge above $3,000 per ounce was driven by President Donald Trump's latest round of tariffs against trading partners. This is the first time since a long period of time when geopolitics and uncertainty in the economy have been the main factors driving the gold market.
Gold spot reached a record of $3,167.57 a troy ounce in the last week. It is up by 16% this year and 27% for 2024. Analysts say that while the market's path will not be linear, gold's entry to uncharted territories looks more sustainable than it did 45 years ago.
Analysts said that because gold has an inverse relationship with trade flows and Trump's tariffs, including the announcement on Wednesday of Washington's highest trade barriers in over 100 years, has driven new investors to gold, fuelled from fear of a full-blown trade war.
Dollars are also known as safe-haven assets, but some signs suggest that their status is eroding due to the uncertainty surrounding tariffs.
Since taking office two-and-a half months ago, Trump upended the global order by signaling that the U.S. might not guarantee Europe's safety as Washington has done since World War Two and by radically changing the U.S. attitude to the war in Ukraine. He has also suggested that the U.S. could annex Greenland.
HSBC's Steel stated that the issues driving gold in the past 45 years - namely the Iranian Revolution and oil crisis – were resolved relatively quickly. This led to a decline in gold.
He said that the failure of international cooperation over the past few years had led to the price of gold remaining high. It leads one to believe... that there is a larger geopolitical demand in the market.
BREAKDOWN COOPERATION
Gold is being driven higher by a number of factors, including trade tensions.
In the 2020s, we saw a two-year pandemic of coronavirus, followed by Russia's war with Ukraine in 2022, China's property market crisis and Israel's Gaza war.
In the Ukraine War, Western sanctions were used to freeze half of Russia's reserves of foreign currency. Moscow was able to retain only gold. This led non-Western central bankers to turn towards gold as they wanted to diversify away from the US dollar.
Western bullion investment increased last year due to monetary easing, and concerns about budget deficits.
To resolve any of these issues, global cooperation may be required of a type not seen yet in the current chaos surrounding tariffs.
George Griffiths is the head of trading at AMT Futures. He said that unlike other crises in recent years, there was no prospect of global policy alignment.
The market has achieved many milestones this year, but one remains. StoneX analyst Rhona o'Connell pointed out that gold reached its peak in 1980 at $850, which is equivalent to $3,486 in today's dollars.
HSBC's Steel stated that while we had certainly reached new heights in nominal terms, it could be argued that we hadn't achieved the milestone in real terms.
This could change. This backdrop has led to a broader expectation of a longer run up, with 2026 being seen as the peak, rather than this year.
Michael Widmer, commodity strategist at BofA, raised his gold forecast on March 26 to $3,063 in 2025, and $3,350 respectively in 2026, up from $2,750 previously. He reiterated this on Sunday. He sees the spot gold price reaching $3,500 in two years.
Calling for $3,000 is easier than $3,500 in gold. What's the second risk? Widmer said.
"The risk that we go back to the situation of two years ago is that we will be in a world where there are no trade wars and where rates have been raised by the U.S. Federal Reserve, where economies have stabilized, and where sentiment has stabilised." The gold trade would then be over."
"But I don't think that it is likely." (Reporting and editing by Polina Devlin, Veronica Brown, and Jan Harvey).
(source: Reuters)