As Trump's mining policy reforms take shape, a significant shift in domestic gold production could create unprecedented opportunities in the mining sector.
Our analysis highlights a critical market development: while the administration pledges to overturn mining moratoriums and accelerate permitting processes, many mining stocks haven't yet priced in these potential regulatory changes. With the average US mine currently taking 29 years to develop, any significant reduction in this timeline could drastically impact valuations across the sector.
To help investors navigate these shifting industry trends, our trusted partner has prepared an essential presentation that demands your immediate attention.
A U.S. gold explorer is making moves just as demand for domestic gold surges. Could this be the perfect timing?
Click here to see why this company is in the spotlight!
President Trump's recent tariff announcements on imports from China, Mexico, and Canada, coupled with threats of 25% tariffs on EU goods, have driven investors toward gold as a safe-haven asset. This comes as both gold markets and the mining sector face significant policy changes.
Gold's extreme price dislocations are showing signs of easing as tightness in the physical market subsides. The gap between Comex futures and the London spot market has contracted to around $10 an ounce from highs of about $60 in January. The normal difference is usually only a couple of dollars, and the contraction indicates the trade incentive is coming to an end after the surge in inflows to the US.
The incoming administration has pledged to overturn a 20-year moratorium on mining in northern Minnesota, signaling a broader shift in mining policy. Despite bipartisan support for accelerating permitting, the time taken for a new US mine to be developed currently averages 29 years ─ the second longest lead time in the world after Zambia.
Gregory Wischer, founder of critical minerals consultancy Dei Gratia Minerals, predicts the administration will "significantly prioritise" building more mines, processing facilities and refineries in the US. While the Biden administration's mineral policy "heavily features international cooperation", an incoming Trump administration is likely to focus on domestic production.
"A Trump administration is likely to be pro-mining, which means more mines could be permitted and put into production faster."
- Hugues Jacquemin, CEO of Northern Graphite
|
Trusted Partner Presentation
Why is a $12B Gold Miner Watching a $20M Junior? |
The Biden administration has already raised tariffs on Chinese exports in key sectors: semiconductors (from 25% to 50%), solar cells (from 25% to 50%), electric vehicle batteries (from 7.5% to 25%) and EVs (from 25% to 100%). These existing measures provide context for potential future policies.
"Regarding mining, the ongoing US-China decoupling will likely continue along its current trajectory under a Trump presidency, given the sharp increase in tariffs already implemented under the Biden administration. However, the US remains comparatively weak in the raw materials aspect of key technology value chains, which will hamper its ability to scale the manufacturing of these technologies domestically."
- Clarice Brambilla, energy transition analyst at GlobalData
Gold stockpiles at Comex depositories have reached 39.5 million troy ounces as of early March, the highest in four years. That's nearly enough physical metal to cover the bullion dealers, fund managers and other participants currently holding short positions on the exchange.
"That trade is getting exhausted. There are now a lot of kilo bars in the US, which is not a natural market."
- Bart Melek, global head of commodity strategy at TD Securities
According to Frank Fannon, former US Assistant Secretary of State for Energy Resources, the administration is expected to tighten provisions related to Chinese content in critical minerals. Current lease rates for borrowing gold in London are normalizing, with the implied interest rate now close to zero after hitting multi-decade highs in January.
The rare discount for gold in the Bank of England vault to the wider London market has narrowed to less than $5 an ounce. The urgency to move metal into the US created significant logistics bottlenecks in London, the world's largest physical trading hub for bullion.
"London is probably the cheapest place to store. Depending on where client demand is — could be in Hong Kong or it could be India — we move the material where there's demand for it."
- John Chen, regional head of commodities sales for Standard Chartered Plc in Singapore
A Republican-majority Congress will support Trump's more extreme protectionist policies, according to analysts from GlobalData TS Lombard. However, this united government also increases risks and opportunities for business due to faster and more coordinated legislative and executive action.
"When it comes to the commodity markets, a Trump win is likely to mean some short-term turbulence. Energy transition metals will remain a priority. As a crucial element in everything from electric grids to battery production, America's demand for copper will remain healthy, and the world is shifting towards renewable energy and EVs."
- John Sisay, CEO of Consolidated Copper
With no clarity yet on whether gold will be included in Trump's tariff measures, the price differential between New York and London could widen again. The administration's focus on domestic mining development and stricter trade policies with China may create new considerations for precious metals investors. The elevated level of inventory on Comex may provide comfort to dealers who typically prefer to hold stock in cheaper London vaults.
Bloomberg News March 4, 2025
The Armchair Trader March 4, 2025
Mining Technology November 7, 2024
|
A puzzling disconnect has emerged: gold is at $1,900+ while mining stocks are priced for $1,800. Industry analysts are calling this the largest valuation gap they've ever seen in the sector.
Gold is trading near record highs, but mining company valuations tell a completely different story. This puzzling disconnect has caught the attention of major market analysts.
Breaking news: The U.S. just escalated the global trade war with punitive tariffs reaching 25%. While markets tumble, gold miners are reporting their best quarterly results ever.
MarketsAndPolitics.com, owned by Sandpiper Marketing Group, LLC, is being compensated up to thirty-five hundred dollars on a per-click basis by i2i Marketing Group, LLC for advertising West Point Gold (WPGCF). Ads labeled "Trusted Partner Presentation" or "Sponsor" are paid promotions.
Please keep in mind that MarketsAndPolitics.com is not a registered investment advisor or broker-dealer. The information on this site is for general informational purposes only and should not be considered financial advice, investment recommendations, or an offer to buy or sell any securities. Always do your own research before making any financial decisions.
Investing in stocks, especially smaller or less-known companies like WPGCF, carries risks. Prices can be volatile, and there is a chance you could lose your entire investment. If you're considering investing, we strongly encourage you to speak with a qualified financial professional.
Since we are being paid for this content, there is a financial incentive for us to promote WPGCF. Please assume that all sponsored content on this site is a paid advertisement.
Some of the information in sponsored content may include forward-looking statements, which are based on expectations and assumptions that could change. Actual results may differ, so be sure to evaluate all information carefully.
By engaging with this content, you acknowledge that you have read and understand this disclaimer. We encourage you to make informed decisions by doing your own due diligence.
