The hamster strategy: the U.S. is stockpiling raw materials

XAU/USD

Key zone: 4,650.00- 4,850.00

Buy: 4,850.00 (after retesting the 4700 level); target 5,100-5,250; StopLoss 4,750.00

Sell: 4,600.00 (on strong negative fundamentals); target 4,250-4,150; StopLoss 4,700.00

The Trump administration is launching a program to create a strategic reserve of critically important minerals with an initial funding volume of about $12 billion. There have been no official comments from the White House so far, but the declared goal of the project is to reduce dependence on China, while economic and corporate interests are not being canceled.

The project called Project Vault, reported by Bloomberg, is being built by analogy with the U.S. Strategic Petroleum Reserve (SPR). The initiative is aimed at compensating for what U.S. authorities consider price manipulations in the markets for lithium, nickel, rare earth elements, and other critical minerals used in the production of electric vehicles and high-tech weapons. According to Trump, it is precisely these price distortions that for a long time restrained the development of the American mining industry.

The financial structure of the project предполагает the combination of private investments in the amount of $1.67 billion with a $10 billion loan from the U.S. Export-Import Bank.

The funds will be directed to the purchase and storage of strategic minerals for automakers, technology companies, and other key industries.

More than ten large corporations are involved in the project, including General Motors, Stellantis, Boeing, Corning, GE Vernova, and Google. Trading companies Hartree Partners, Traxys North America, Mercuria Energy Group, and others will handle the procurement of raw materials for the “state warehouse.” It is expected that the formed reserves will include both rare earth elements and other strategically significant materials subject to sharp price fluctuations.

The main goals of the initiative:

• Reduce critical dependence on China, which controls a significant share of production and processing of rare earth elements (about 70–90% in different market segments).
• Create a protective buffer for the automotive industry, defense industry, electronics, IT, and energy in case of force majeure and disruptions in global supply chains.
• Support stability within economic and defense sectors.
• Stabilize market prices and stimulate the development of domestic mining and processing.

The Board of Directors of the U.S. Export-Import Bank, according to Bloomberg, is preparing to approve a record 15-year loan, the amount of which is more than double the previous maximum.

In parallel with the formation of the strategic reserve, the U.S. is financing the development of an alternative supply chain covering raw material extraction, technological solutions, and industrial production.

At the same time, trade alliances and agreements with Australia and other allies are being formalized to expand access to rare earth minerals and reduce the global concentration of supplies.

The key beneficiaries of the project are American companies operating in the segment of extraction and processing of critical materials, for example:

• MP Materials Corp., the largest operator for rare earth mining in the U.S. with the Mountain Pass asset in California;
• USA Rare Earth Inc. with the Round Top project in Texas and magnet production;
• NioCorp Developments Ltd with the Elk Creek project in Nebraska, focused on niobium, scandium, and titanium;
• Energy Fuels Inc., engaged in uranium and rare earth mining with processing at the White Mesa Mill.

For investors, specialized funds and ETFs are also available, including the VanEck Rare Earth and Strategic Metals ETF and the Sprott Critical Materials ETF.

When assessing investment potential, it is necessary to take into account geopolitical risks associated with possible retaliatory measures by China, including export restrictions and tariffs, technological risks caused by the emergence of alternative materials and new processing methods, as well as regulatory risks, since government programs are subject to changes depending on the political cycle.

So the market is being “fed” not only by gold and silver, but also by rarer and more valuable materials. These directions open up additional opportunities, but require systematic analysis of risks, demand structure, and long-term sectoral trends.

So we act wisely and avoid unnecessary risks.

Profits to y’all!