Gold prices have reached the highest point ever lately because the US market is going cray-cray. This comes after US President Donald Trump tries to kick out Federal Reserve Chair Jerome Powell, making people worry about the central bank’s independence. This has led investors to move their money from the dollar to gold. Gold is a classic asset that plays opposite to the stock market and helps investors make bank by going up in value. You can invest in gold by buying physical gold, investing in exchange-traded funds that follow gold prices, or investing in gold mining companies.
On Tuesday, NovaGold Resources shares jumped up by 40% to £3.27 ($4.35) after billionaire John Paulson’s company got into a deal with the company to buy a piece of Alaska’s Donlin gold mine project. Paulson’s hedge fund, Paulson Advisers, is working with NovaGold to buy a big chunk of Barrick Gold’s stake in Donlin Gold. This deal is worth a whopping £752.03 million ($1 billion). When the deal closes, Paulson’s company will own most of the project.
NovaGold also has the option to buy Barrick Gold’s debt linked to the Donlin project for £67.68 million ($90 million) before the deal is done. The deal should be finished by Q2 or early Q3. If NovaGold doesn’t choose to buy the debt, it will stay unpaid. After this news, NovaGold’s stock went up, while Barrick Gold shares dropped over 2%. But, Barrick’s shares have gone up 29% so far this year.
Paulson says that Donlin Gold is a super cool project with 39 million ounces of gold and a great location in Alaska, which is a top gold-producing state in the US. This is important because many mining companies can be found in tough political areas and deal with lots of rules.
Paulson is a big shot gold investor with a net worth of £2.85 billion ($3.8 billion). Other than investing in the Alaskan project, he also has stakes in other gold mining companies. This NovaGold deal happened after an expert pointed out that some stocks are a better investment than gold itself.
Paulson is also known for making big profits during the subprime mortgage mess over ten years ago. Before the 2024 election, he said he would pull his money out of the market if Kamala Harris became president. He thought her plans would make markets shaky.
Just a reminder, our content is just for fun and not investment advice. Do your homework or ask a real expert before putting your money in. Remember, the stock market is risky and past wins don’t mean future ones.
