OrePulse

Precious Metals

Posted By OrePulse

Published: 03 Jul, 2025 08:26

Gold and its miners may enjoy a 'critical mineral' upgrade

Is gold the next metal to be added to the list of "critical minerals"?

Gold is not a vital component of advanced manufacturing like other critical minerals such as rare earths, lithium and copper.

But the precious metal appears to be undergoing a subtle shift in how it is viewed by governments and investors.

Since countries moved away from the gold standard by the early 1970s, gold has largely been viewed as a relatively niche part of investment portfolios and government reserves.

Gold was something that was added to portfolios as an inflation hedge or during times of heightened geopolitical tensions.

In some ways, the role of gold in both central bank and investment portfolios was overtaken by bonds, with U.S. Treasuries becoming the most important of these assets.

But the return of Donald Trump to the U.S. presidency is leading to a global reassessment of the relative safety of U.S. assets, the independence of the Federal Reserve and the likely worsening of the U.S. fiscal position.

Add in Trump's attacks on the rule of law in the United States and the likely hit to both the U.S. and global economies from his trade policies, and the stage is set for a reevaluation of the role of gold.

The precious metal has gained 32.3% from a low of $2,536.71 an ounce hit on November 14 in the days after Trump's victory over his Democratic Party rival, former Vice President Kamala Harris.

It reached a record high of $3,500.05 an ounce on April 22, and has since retreated slightly to close at $3,357.08 on Wednesday.

While gold's day-to-day moves are still largely driven by the news cycle, the overall backdrop looks supportive.

The World Gold Council released a report last month in which it surveyed 73 central banks, and 95% of them expected the official sector to increase holdings in the coming 12 months.

"This is a record high since it was first tracked in the 2019 survey and represents a 17% increase from the 2024 findings," the council said.

Central banks are also moving to repatriate more of their holdings back to their home countries and away from the United States, a further sign that there is a loss of confidence in U.S. assets and the policies of the Trump administration.

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