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September 18, 2024

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As of Tuesday, the CME’s FedWatch Tool gave a 67% chance of a 50 basis-point rate cut—way up from the 25-point cut everyone was betting on just days ago. A rate cut could send the price of gold soaring past its all-time high, so investors and goldbugs are on edge, waiting for the results of this week’s FOMC meeting.

Suppose the expected rate cuts do take place and gold price jumps. How high can the yellow metal soar? The tricky part is that these levels have no historical prices to gauge such a move.

Fundamental analysts are all over the place with their projections, leaving you more confused than informed. But don’t worry; there are technical tools you can use to gauge potential upside and keep an eye on any downside risks.

Using the ACP Fibonacci Extension Tool

Pull up a SPDR Gold Shares ETF (GLD) chart in StockChartsACP. Using the annotation tool, draw a Fibonacci Retracement line from the February low to the May high. Click on the extensions in your settings to get price projections beyond the 0% to 100% measure. Also, be sure to check the extension levels you want to see.

This is what the chart should look like (see weekly chart of GLD below).

CHART 1. WEEKLY GOLD PRICE CHART. Setting your extension levels will help you get price projections for GLD.Chart source: StockChartsACP. For educational purposes.

Here’s what to keep an eye on:

  • The 127.20% extension has already been met as profit-takers began selling their position.
  • If GLD continues to move higher, the next upside targets are $242.50 (138.20% Fib extension) and $252.70 (161.80% Fib extension).

These are your two intermediate-term targets. Anything above that is possible, but you’ll need to check the fundamentals and technicals before making new projections.

But what if prices dip? How do you measure the pullback to decide if it’s a good time to jump in or if it’s headed for a bigger drop—meaning you should wait it out?

To answer that, let’s shift to a daily SharpCharts view of GLD.

Using Quadrant Lines to Gauge a Pullback

CHART 2. DAILY GOLD PRICE CHART. Note the short-term and intermediate-term quadrant lines. However, don’t ignore the divergence between price movement and the Money Flow Index (MFI) in the top panel.Chart source: StockChartsACP. For educational purposes.

The chart has two types of Quadrant Lines:

  • The blue Quadrant Lines measure the short-term price action.
  • The red Quadrant Lines measure the intermediate-term price action.

Not familiar with Quadrant Lines? In a nutshell, Quadrant Lines break down the high-low range into four sections. Think of them as a visual guide to see where prices stand within that range. Like Fibonacci retracements, they can spot potential reversals—a shallow 25% pullback might show strength, while a deeper 75% retracement could signal a potential reversal.

With this in mind, note the following:

  • Based on the short-term lines, the price of GLD can pull back to $231 without messing up the short-term trend, but, if price breaks below $228.50, that’s a different (and bearish) story.
  • The intermediate-term uptrend is still intact as long as GLD stays above $223, but, if it falls below $218, that trend’s out the window, too.

In terms of momentum:

  • Buying pressure continues to rise, based on the Chaikin Money Flow (CMF).
  • However, if you look at the Money Flow Index (MFI), which functions like a volume-weighted RSI, note the divergence between the MFI line and the price of GLD; this indicates the likelihood of a continued pullback (so watch those quadrant lines!).

At the Close

Predicting the price of gold beyond all-time highs is tough, but, if fundamental tools fall short, technicals can offer clarity—whether prices keep climbing or take a dip. As far as gold prices are concerned, watch GLD’s next moves closely and use Fibonacci Extensions and Quadrant Lines to help inform your setup.



Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

The broader stock market indexes are still in a holding pattern as investors await the Fed’s decision on Wednesday. Tuesday’s price action was a little like a “Whac-a-Mole” game for the S&P 500 ($SPX) and Nasdaq Composite ($COMPQ). Both indexes poked above their downward-sloping trendlines (the Nasdaq’s line is steeper) but fell back below them by Tuesday’s close. The Dow Jones Industrial Average ($INDU), which hit an all-time high on Monday, also retreated, snapping its four-day up streak.

Small- and mid-cap stocks were Tuesday’s leaders, with the S&P 400 Mid-Cap Index ($MID) up by 0.34% and the S&P 600 Small-Cap Index ($SML) up 0.60%. 

Turning to the Extended Factors Market Factors data panel on the StockCharts Dashboard, small-cap revenue (RWJ) and small-cap quality (XSHQ) ETFs were the biggest gainers. The Invesco S&P SmallCap 600 Revenue ETF (RWJ) took the lead at the end of last week—we mentioned this in our weekly ChartWatchers newsletter—and continues gaining strength and momentum.

A Weekly Perspective

It’s worth breaking down the price action in RWJ before Wednesday’s FOMC meeting, starting with the weekly chart.

FIGURE 1. WEEKLY CHART OF INVESCO S&P SMALLCAP 600 REVENUE ETF. RWJ has been trading within a range since early 2021. It’s getting ready to break out of the range, but whether it does will depend on how the Fed’s decision appeals to investors.Chart source: StockCharts.com. For educational purposes.

RWJ has been in a trading range since early 2021 (blue rectangle). During that time, investors gravitated toward mega-cap Tech stocks while other asset classes, such as small-cap stocks, were left behind. But that could change depending on what the Federal Reserve decides on Wednesday. Interest rate cuts would benefit small-cap stocks. That RWJ is trading above its trading range indicates that investors are hopeful the Fed will decide on a half-point rate cut.

The StockCharts Technical Rank (SCTR) in the top panel is at 89, which indicates that RWJ is technically strong. A rate cut could increase this score if investors continue accumulating this ETF. The relative strength index (RSI) is stalling between 50 and 70. A break above 70 would be positive for RWJ, whereas a fall below 50 would show that interest in the ETF is weakening.

But what if the Fed decides on a quarter-point cut instead of the half-point the market expects? Will investors get disappointed and sell off their small-cap stocks? Remember, the stock market can change quickly for no sound reason. This is why it’s best to map out bearish and bullish scenarios ahead of a volatile trading day.

Let’s examine RWJ’s daily chart to understand the two scenarios better.

FIGURE 2. DAILY CHART OF RWJ. The ETF must close above its last high of $45.39, and the MACD should reflect stronger buying pressure.Chart source: StockCharts.com. For educational purposes.

A series of higher highs will confirm an uptrend. If RWJ closes above its last high of $45.39, it could break the slightly bearish trend the ETF has been in for the last month and a half.

The moving average convergence/divergence (MACD) indicator, which is also trending lower, shows early signs of increasing bullish pressure. The MACD line has just crossed over the signal line, and the MACD histogram is slightly above the zero line. But it must be much more prominent to confirm a bullish move in RWJ.

If bullish momentum kicks in on Wednesday after the Fed makes its interest rate decision, an ideal entry point would be at $45.50, around its July 31 close. If the Fed’s decision disappoints and doesn’t favor small-cap stocks, then focus on which asset classes outperform from the Market Factors panel in the StockCharts Dashboard.

Closing Bell

If it’s time for small-cap stocks to shine, you could enter the bull run early. But remember, this is a new all-time high for RWJ, so if you enter a position, keep an eye on momentum. As long as momentum keeps the ETF rising, you can ride out your position, but if you have made a respectable profit and detect a slowdown, be prepared to exit your positions. There’s no reason to be married to an investment.



Disclaimer: This blog is for educational purposes only and should not be construed as financial advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional.

Only a month after the discovery of the second largest diamond ever recorded, Lucara Diamond (TSX:LUC,OTC Pink:LUCRF) has announced the recovery of another significant stone from its Karowe mine in Botswana.

The new find is 1,094 carats compared to the massive 2,942 carat rough diamond uncovered by Lucara in August, solidifying Karowe’s reputation as one of the world’s most prolific sources of large diamonds.

The rough diamond is the sixth stone over 1,000 carats that Lucara has unearthed from the mine. According to the company, the EMPKS ore type at Karowe’s South Lobe hosts these large, high-value stones.

The company said the newly recovered 1,094 carat diamond will be polished through its partnership with HB Antwerp, a collaboration responsible for processing several of Lucara’s previous large stones. The August discovery is slated for evaluation and processing as well, with both stones expected to yield significant returns once polished.

Previous collaborations with HB Antwerp have resulted in polished diamonds worth over US$13 million.

‘The recovery of this exceptional 1,094 carat diamond is a testament to Karowe’s remarkable potential and further validates our investment in the underground expansion project,’ said Lucara President and CEO William Lamb.

“These continued discoveries of large, high-value diamonds demonstrate the consistent quality of our resource and its ability to deliver substantial returns,” he added in a Sunday (September 15) press release.

In addition to Lucara’s recent 1,094 and 2,942 carat discoveries at Karowe, other notable recoveries include the 1,758 carat Sewelô diamond, discovered in 2019, and the 1,109 carat Lesedi La Rona diamond, found in 2015.

Lucara’s use of cutting-edge technology has been key in these recoveries. Since implementing X-ray transmission technology in 2017, it has been able to detect large diamonds while minimizing the risk of damage during extraction.

Botswana, where Karowe is located, is a key player in the global diamond production industry. The country is the largest miner of diamonds by value and is second only to Russia in total production.

Lucara’s ongoing recoveries further bolster Botswana’s standing, particularly as the government seeks to ensure more profits from diamond mining remain in the country. The nation has recently proposed new regulations requiring mining companies to sell a 24 percent stake to local investors unless the state chooses to take the stake itself.

Furthermore, Botswana has been working to increase its influence in the industry, particularly through negotiations with De Beers, the world’s largest diamond producer, through a new 10 year agreement signed in 2023.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) has introduced a voluntary retirement scheme for employees at its Cobre Panama mine as it awaits government action on whether operations will be able to resume.

This comes after the mine’s closure in November 2023 due to a ruling from Panama’s Supreme Court that declared the company’s mining contract unconstitutional following months of environmental protests.

Reuters reported on Monday (September 16) that sources familiar with the matter say First Quantum has offered the voluntary retirement option as part of its efforts to manage the uncertainties surrounding the mine’s future.

Employees must decide whether to accept the retirement package, which would take effect in January 2025, or continue working reduced hours. The window for workers to make their decision is set to close at the end of September.

The closure of Cobre Panama has significantly reduced its workforce. From a high of 6,000 employees, approximately 900 workers remain at the site. While a small number of workers have already accepted the voluntary retirement offer, most are opting to work with reduced hours, according to one of the sources, who spoke on condition of anonymity.

Michael Camacho, who represents the Panama Mining Workers Union, confirmed the retirement scheme’s existence and said some workers have opted into it. He also noted that First Quantum has not yet received clear guidelines from Panama’s government on what safety measures would need to be implemented for operations to restart.

The new Panamanian administration, led by President Jose Raul Mulino, has said the mine’s future will not be addressed until early 2025, leaving First Quantum and its employees in a state of prolonged uncertainty.

Cobre Panama is a major asset for First Quantum, accounting for a substantial portion of the company’s copper output while playing a key role in its efforts to manage its debt. Financial pressures have grown as 130,000 metric tons of copper concentrate remain stockpiled at the mine, awaiting a government decision on whether it can be exported.

The company is also pursuing compensation for the suspension of operations at the site.

First Quantum has invested approximately US$10 billion in developing the mine, which has proven and probable reserves of around 3 billion metric tons, over the course of a decade.

The potential to resume operations remains crucial to the company’s long-term financial stability, as well as to Panama’s economy, as Cobre Panama has contributed an estimated 5 percent to the nation’s GDP.

The uncertainty surrounding Cobre Panama has also drawn attention from copper investors. The mine represents about 1 percent of global output of the red metal, and its closure has brought deficit concerns forward.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

Speaking ahead of the US Federal Reserve’s much-anticipated September meeting, John Reade, senior market strategist at the World Gold Council, shared his thoughts on where gold is in the current cycle.

‘Coming up to what is widely expected to be the start of a US rate-cutting cycle, ironically you could actually say that gold is early in the cycle. Gold typically performs pretty well when rates are cut, and if those rate cuts lead to weakness in the US dollar, which they certainly might, that could be a double tail wind helping the metal from here,’ he explained.

‘So this cycle’s been quite different, and that makes answering (the) question quite tricky.’

When asked about gold price drivers, Reade said emerging markets been top of mind this year.

However, in his view a shift could now be taking place, ‘As emerging markets are slowing somewhat, and interest rates are starting to come lower in the west, we might see a reversion to what is typically seen as the driver of gold — so slavishly following the US dollar and moves in interest rates and interest rate expectations,’ Reade said

‘I’ll reiterate — I think it’s going to be western macroeconomic factors that probably take the lead in determining gold’s direction for the balance of this year and into 2025,’ he emphasized during the conversation.

Watch the interview above for more of his thoughts on gold demand and price factors.

Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

BPH Energy Limited (BPH) (ASX: BPH) and Bounty Oil & Gas NL (Bounty) (ASX: BUY) for the PEP11 Joint Venture announce that today that the Hon Ed Husic MP, Minister for Industry and Science, has advised that he has carefully considered the PEP-11 Exploration Permit applications under the Offshore Petroleum and Greenhouse Gas Storage Act 2006 (Cth), namely the applications accepted on 23 January 2020 and 17 March 2021, and formed a preliminary view that the applications should be refused.

The Company is forwarding the relevant correspondence to its lawyers and will update the market as appropriate.

David Breeze (Director) authorised the release of this announcement to the market.

Click here for the full ASX Release

This post appeared first on investingnews.com

Microsoft (NASDAQ:MSFT) announced it is developing a new platform aimed at helping cybersecurity firms operate without accessing the kernel mode of its Windows operating system.

Bloomberg reported that the company’s move comes after an incident in July when an update from CrowdStrike Holdings (NASDAQ:CRWD) caused a widespread outage affecting millions of Windows computers.

On Tuesday (September 10), Microsoft held a meeting with cybersecurity firms to discuss the potential risks of allowing third-party security vendors to access the kernel, the core part of its operating system.

During this meeting, discussions focused on finding ways to reduce the likelihood of future incidents similar to the July outage, which disrupted operations for several industries, including airlines, banks and healthcare providers.

This sparked a debate about whether security vendors should have access to the kernel, as such access carries significant risks when updates or other changes malfunction. The kernel is the core component of an operating system that manages system resources and facilitates communication between hardware and software.

Microsoft is now seeking to find alternative ways for cybersecurity companies to operate while protecting customers. The company will be designing and developing new systems to address concerns raised by both customers and partners. It intends to offer greater reliability without compromising the security functions required by cybersecurity firms.

By moving away from kernel-level operations, Microsoft hopes to reduce the possibility of global outages while still providing robust protection against cyber threats.

Company executive David Weston reiterated this stance during a cybersecurity summit, stating that collaboration with industry players is essential for ensuring a safer and more reliable digital environment. “Both our customers and ecosystem partners have called on Microsoft to provide additional security capabilities outside of kernel mode which, along with safe deployment practices, can be used to create highly available security solutions,” he said.

Weston added that the company is committed to working with cybersecurity vendors to develop solutions that protect users while minimizing risks associated with kernel access.

CrowdStrike, which was at the center of the July incident, expressed its willingness to participate in ongoing discussions with Microsoft and other industry leaders to improve cybersecurity protocols.

The July incident impacted approximately 8.5 million devices, leading to widespread disruptions.

Delta Air Lines (NYSE:DAL), one of the companies most affected by the outage, has since announced that it is pursuing legal action against both CrowdStrike and Microsoft. The airline estimates that the outage cost it more than US$500 million due to flight cancellations and other operational challenges.

Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.

This post appeared first on investingnews.com

Is it a prelude to a wider attack or the totality of the message to Hezbollah? This is the key question for the next 48 hours in the Middle East, as the Lebanese militant group comes to terms with the wholesale disruption and violation of their most sacred communications.

Tuesday’s wave of explosions in Lebanon will likely scar the Party, as they are often known, who pride themselves on secrecy, and the technological omerta their members adhere to. Yet it is their very bid to keep their secrets – using low-tech pagers and not more trackable smartphones – that appears to have led to several deaths and thousands of injuries.

It will have caused a seismic shock with Hezbollah members to now be asking not only if it is safe to contact their colleagues, but if those colleagues are unharmed?

Israel has characteristically not claimed responsibility, but if it was behind the attack as Lebanon and Hezbollah say, then the question is whether this vast and unprecedented assault was intended to presage a wider fight.

It would make strategic sense to dispense a moment of intense chaos like this just before a bigger onslaught on the group militarily.

The timing is telling. Just on Monday, the Israeli defense minister Yoav Gallant said during a meeting with the US envoy Amos Hochstein that the time for diplomacy with Hezbollah had passed and military might could take center stage. Literally hours later, their enemy’s entire communications infrastructure was hit with an attack that, according to a Lebanese security source, used pagers purchased by Hezbollah in “recent months,” necessitating a long lead time in the operation’s planning.

The violence again spoke of a technological gulf between Israel and its opponents. We have seen this repeatedly in high-profile killings in Tehran over the past years: the precision of an apparent Mossad strike against an al-Qaeda leader in 2020. The wizardry behind the killing of nuclear scientist, Mohsen Fakhrizadeh, which reportedly used facial recognition to fire a machine gun. And the recent assassination of Hamas leader Ismail Haniyeh, which reportedly used a remote-controlled bomb hidden in a guest bedroom.

The same superior intelligence and capability was on display across Lebanon, where civilians appear to have been caught in widespread blasts that were not precise enough. The horror of hundreds of apparently simultaneous tiny but intimate explosions will be felt by ordinary Lebanese, a reminder of the damage inflicted nationwide by the 2006 war with their southern neighbor. The risk of widespread war with Israel again has become a pressing reality since the October 7 attacks.

It places Hezbollah, however, in another unenviable moment of frailty – plunged into chaos, with great pressure upon them to project strength again. The same dilemma was visited upon them after the assassination of senior commander Fu’ad Shukr in August. Hezbollah felt compelled to strike back, and maintain a sense of deterrence. Yet it became slowly clear they lacked enthusiasm for a larger conflict. Leader Hassan Nasrallah delayed their response to a time of his choosing, and enabled the muted exchange of rocket fire and airstrikes that followed on August 25 to not get out of hand.

At the same time, the given wisdom that Israel does not want a war either is eroding. Israeli airstrikes hit targets to their north almost daily, with a growing absence of concern about Hezbollah’s response. Tuesday’s wide-ranging attack on Lebanon will necessitate Hezbollah finding some means of projecting strength through retaliation, but again speaks to the gap between their capabilities and those of their southern neighbor.

A long ground war between the two would see Israeli forces, over-stretched and exhausted by a brutal year-long Gaza campaign, facing to their north an enemy fresher and better-trained than Hamas. Hezbollah will still be able to inflict significant damage upon Israel if a full-scale battle erupts. But Israel may have decided too cleanly that Hezbollah seeks to avoid war, and therefore can be goaded repeatedly.

It may be precisely the sort of miscalculation that leads to a widening of the conflict; the moment when Hezbollah determine Israel have dismissed them as a persistent threat will be the moment they feel compelled to act most violently.

The pager blasts could speak of a war where one side is confident in its huge advantage technologically, but also willing to absorb the risks that come with inflicting a wide-ranging embarrassment on its foe. We will learn in the coming days if the calculations behind the attack avoided escalation, or fomented it.

This post appeared first on cnn.com

As Russia’s military last week launched globe-spanning drills widely seen as a show of strength directed at the United States, President Vladimir Putin made clear which country he sees as standing by Moscow’s side.

In an opening video address, Putin said 15 “friendly” nations would observe what Moscow claimed were some 90,000 troops and more than 500 ships and aircraft mobilized for the largest such exercises in 30 years.

But only China would take part alongside Russia, according to Putin.

“We are paying special attention to strengthening cooperation with our friendly countries. This is especially important today amid rising geopolitical tension around the world,” the Russian leader said.

Dubbed “Ocean-2024,” the seven days of drills that ended Monday are the latest in a recent slew of military exercises and joint patrols between Russia and China that come on the heels of vows from Putin and Chinese leader Xi Jinping to tighten military cooperation, even as the Kremlin wages its war against Ukraine.

China sent several warships and 15 aircraft to waters off Russia’s Far East coast for Ocean-2024, according to the Russian military. In addition, Chinese and Russian forces this month touted deepened strategic coordination during joint naval drills in waters near Japan and held their fifth joint maritime patrol in the northern Pacific.

It follows a raft of joint exercises over the summer, including near Alaska – where US and Canadian forces intercepted Russian and Chinese bombers together for the first time – and in the South China Sea, a vital waterway claimed almost entirely by Beijing in which geopolitical tensions are rapidly rising.

That coordination has been watched with increasing concern in Washington, which has for months accused China of bolstering Russia’s defense sector with dual-use exports like machine tools and microelectronics, a charge Beijing denies as it claims neutrality in the conflict.

It also comes as the war in Ukraine grinds on and threats escalate, with Putin warning NATO leaders that lifting restrictions on Kyiv’s use of longer-range Western missiles to strike deep inside Russia would be considered an act of war.

The latest Russia-China military drills fit a pattern of more than a decade of enhanced military coordination between the two countries, experts say.

But at a time of heightened global tensions – including over Russia’s war in Ukraine, China’s aggression in the South China Sea, and its claims to the self-ruled island of Taiwan – they also underscore how Moscow and Beijing increasingly view each other as key to projecting strength.

The joint drills also raise questions about whether the two nuclear-armed powers, which are not treaty allies, could act together in any potential future conflict.

‘Improving and consolidating’

The relationship between these two giant neighbors has never been simple.

Moscow and Beijing were once enemies that fought a 1969 border conflict between the Soviet Union and a young Communist China. But recent decades have seen a robust arms trade between the two, and – especially as Xi and Putin tightened ties more broadly – a scaling up of military coordination.

Between 2014 and 2023, the two militaries have held at least four and as many as 10 joint military exercises, war games or patrols each year, including multilateral drills with other countries, according to data from the Center for Strategic and International Studies (CSIS).

Those drills and patrols have also appeared to observers to become increasingly complex – for example involving both navy and air forces or more advanced equipment, as well taking place in farther-flung parts of the world.

In a first this July, both the Chinese and Russian aircraft intercepted near Alaska took off from the same Russian air base, according to CSIS researchers, who also noted this was the partners’ first joint air patrol in the northern Pacific.

“They’re not as interoperable as NATO allies, but they are improving and consolidating this strategic partnership or alignment,” said Alexander Korolev, a senior lecturer in politics and international relations at the University of New South Wales in Sydney.

Being able to work together as a single entity is a core ethos of NATO, the decades-old alliance of 32 member nations that is bound together by a mutual defense pact and is viewed by both China and Russia as a key military rival.

The demonstration of Russia and China’s consolidation has a clear audience: the US and its allies.

Putin and Xi have been driven together by a shared view that the West aims to suppress their core interests. For Putin, those concerns include preventing NATO expansion, while Xi eyes control of Taiwan and South China Sea domination.

Putin spelled out that context in his video address launching Ocean-2024, accusing the US and its allies of “using the alleged Russian threat and the China containment policy as a pretext for building up their military presence along Russia’s western borders, as well as in the Arctic and in Asia-Pacific.”

The Russian leader also warned that the US planned to station intermediate and shorter-range missiles in “forward deployment areas,” including the Asia-Pacific region. This appeared to echo comments Putin made over the summer criticizing Washington’s and Berlin’s plan to deploy US long-range missiles in Germany from 2026, and of the US temporarily sending a powerful missile launcher for exercises in the Philippines earlier this year – a move also condemned by Beijing.

Both Russia and China want to show the US and its allies that their “two militaries are becoming increasingly integrated and any challenge to either risks a combined response,” said Carl Schuster, a retired US Navy captain and former director of operations at the US Pacific Command’s Joint Intelligence Center.

“They are saying in effect that we can do to you, that is, operate in your backyard like you have been doing in ours.”

The drills also provide opportunities for each to learn from the other – as Russia, with its extensive battlefield experience, and China, which has become increasingly advanced in electronic military technologies, each have something to learn from the other, observers say.

Korolev said it’s “increasingly difficult” in the wake of the Ukraine war and extensive Western sanctions to know the extent to which the latest drills are also sustaining Sino-Russian technical cooperation on arms, which previously was a feature of their years of steadily enhanced military collaboration.

Double threat?

In Washington, the optics of the tightening ties are raising concerns over the risk of a simultaneous US military conflict with China and Russia, or even one that could also include other partners, like Iran, with which the two countries held naval drills earlier this year. There are also concerns about Moscow’s potential support for Beijing in any war in Asia-Pacific.

There, Beijing and Washington navigate a host of potential flashpoints including China’s designs on Taiwan and its mounting aggression in the South China Sea against US treaty ally the Philippines. Both Russia and China have also been warily watching the US’ strengthening of its longstanding ties with regional allies.

But observers say that despite the growing coordination within joint drills, it’s unlikely there is a clear end goal past sending a strong signal – at least for now.

“I don’t know that you are going to see Russian planes supporting a Chinese attack on Taiwan, for example, or in a conflict with the Philippines are Russian vessels are going to support Chinese ones? I doubt it,” said Elizabeth Wishnick, a senior research scientist in the China and Indo-Pacific Security Affairs Division at independent research group CNA.

While Russia and China may have “overlapping interests” they are not on the same page on strategic goals in the region, she said.

“I don’t think you can assume that just because they’re having more military exercises that they’re in lockstep,” she said.

In joint statements, China and Russia insist their relationship is one of non-alignment that doesn’t target any third party.

Each also has different geopolitical objectives in the region. Russia, for example, maintains close ties with China’s rival India – and is likely eager to prevent any Chinese ascendancy in Asia that deepens the power imbalance between Beijing and Moscow.

In turn, China would also be wary of compromising its own strategic aims by acting too directly in concert with Russia – but also of any action that could destabilize warming ties with its northern neighbor following decades of fractious relations that have previously spilled over into conflict.

“Simply put, China sides with no one but itself,” said James Char, an assistant professor at Nanyang Technological University’s Institute of Defense and Strategic Studies in Singapore. “Beneath the surface, China and Russia continue to harbor deep mutual mistrust.”  
 
But observers say there’s still a potential range of ways the partnership could come to bear if conflict were to break out in Asia involving China.

Russia would at least reciprocate with the kind of diplomatic and economic support that Beijing has extended to Moscow during the war in Ukraine, analysts say, and would also likely help provide weapons and discounted energy.

When it comes to joining China in any potential conflict with the US, however, Russia may have “more to lose and little to gain,” according to Schuster, the retired Navy captain.

But were China to act against Taiwan, the Russian military could potentially offer limited support like sending ships and air force patrols to waters around Japan, or possibly deploy one or two submarines into the Western Pacific, he said.

That would “give the US and its allies another factor of concern as they weigh how to respond,” he said. “But China will have to offer a lot to convince Russia to join that conflict.”

This post appeared first on cnn.com

Hundreds of pagers carried by Hezbollah members in Lebanon blew up nearly simultaneously on Tuesday in an unprecedented attack that surpasses a series of covert assassinations and cyber-attacks in the region over recent years in its scope and execution.

The Iran-backed militant group said the wireless devices began to explode around 3:30 p.m. local time in a targeted Israeli attack on Hezbollah operatives.

Israel’s military, which has engaged in tit-for-tat strikes with Hezbollah since the start of the war with Iran-backed Palestinian militant group Hamas in Gaza last year, has refused to comment publicly on the explosions.

Experts say the explosions, unprecedented in their scale and nature, underscore Hezbollah’s vulnerability as its communication network was compromised to deadly effect.

Who was affected?

Several areas of the country were affected, particularly Beirut’s southern suburbs, a populous area that is a Hezbollah stronghold.

Footage showed shoppers and pedestrians collapsing in the street following the blasts. The blood-soaked injured bore flesh wounds, clips showed, including lost fingers, damaged eyes, and abdominal lacerations.

At least nine people were killed, including a child, and about 2,800 people were wounded, overwhelming Lebanese hospitals.

Why was Hezbollah using pagers?

Hezbollah has long touted secrecy as a cornerstone of its military strategy, forgoing high-tech devices to avoid infiltration from Israeli and US spyware.

Unlike other non-state actors in the Middle East, Hezbollah units are believed to communicate through an internal communications network. This is considered one of the key building blocks of the powerful group that has long been accused of operating as a state-within-a-state.

At the start of the year, Hezbollah leader Hassan Nasrallah called on members and their families in southern Lebanon, where fighting with Israeli forces across the border has raged, to dump their cellphones, believing Israel could track the movement of the Iran-backed terror network through those devices.

“Shut it off, bury it, put it in an iron chest and lock it up,” he said in February. “The collaborator (with the Israelis) is the cell phone in your hands, and those of your wife and your children. This cell phone is the collaborator and the killer.”

Hezbollah instead went low-tech by turning to pagers, according to Avi Melamed, a former Israeli intelligence official and Middle East analyst.

The pagers would have prompted Hezbollah members to contact one another through those phone lines. But even that option was not without risk.

“Hezbollah regressed back to these devices thinking [they] would be safer for its combatants to use instead of phones which could be GPS targeted,” Melamed said. “These very low-tech devices were used against them and very possibly deepening the stress and embarrassment on its leaders.”

How did the pagers explode?

As Lebanon reels from the attack, speculation has mounted on how low-tech wireless communication devices could have been exploited.

The New York Times reported Tuesday that Israel hid explosives inside a batch of pagers ordered from Taiwanese manufacturer Gold Apollo and destined for Hezbollah. A switch was embedded to detonate them remotely, it added.

Most of the pagers were the company’s AP924 model but three other Gold Apollo models were included in the shipment, the Times reported.

Multiple photos that appear to show damaged Gold Apollo pagers have emerged on social media, alongside claims they were damaged in the wave of explosions.

Human operatives inside Hezbollah would have been key to the operation, he added.

“This is one of the most widescale and coordinated attacks that I’ve personally ever seen. The complexity needed to pull this off is incredible,” he said.

“It would have required many different intelligence components and execution. Human intelligence (HUMINT) would be the main method used to pull this off, along with intercepting the supply chain in order to make modifications to the pagers.”

What is the purpose of the attacks?

The operation was also likely designed to create a high-level of paranoia among Hezbollah members, degrade their ability to recruit people, and erode confidence in the leadership of Hezbollah and their ability to secure their operations and people.

Amos Yadlin, a former head of Israeli military intelligence and one of the country’s leading strategic experts, said the Israeli attack displayed “very impressive penetration capabilities, technology and intelligence.”

He speculated on X that Israel could have been sending a warning to Nasrallah.

“It seems the goal was to pass a message that sharpens the dilemma of Nasrallah: how much is he willing to pay for continuing to attack Israel and backing [Hamas leader Yahya] Sinwar?” Yadlin wrote. “The organization, which prides itself on secrecy and a high level of security, found itself penetrated and exposed.”

Or it could be a “prelude to an Israeli large-scale campaign against [Lebanon], at a time when Hezbollah is facing the chaos of this latest very science-fiction-like attack against its operatives.”

Why would Israel want to target Hezbollah?

Israel, which has yet to publicly comment on the deadly incident, leads the list of actors with the intent to degrade Hezbollah, experts say.

Israel has been linked to, or accused of, previous remote attacks in the region. Experts believe Israel and the United States were responsible for deploying a complex computer virus called stuxnet that destroyed centrifuges at an Iranian nuclear facility in 2009 and 2010.

Tuesday’s attack raises tensions in the already inflamed region. Hostilities are at an all-time high between Israel and Hezbollah following Hamas’ October 7 attack on Israel. Hezbollah, which has a formidable arsenal of weapons, has said its attacks on Israel are in solidarity with Hamas and Palestinians in Gaza.

Global leaders have been scrambling to prevent an escalation. US Secretary of Defense Lloyd Austin spoke twice with his Israeli counterpart, Israeli Defense Minister Yoav Gallant, according to two US defense officials.

The official would not specify when the calls took place. Though the two are in regular contact, it’s uncommon to schedule two calls in one day and shows how seriously the US views the current situation.

This post appeared first on cnn.com