What’s driving gold’s price rally?

One of the key catalysts behind gold’s recent surge is central bank demand.

According to the World Gold Council, central banks purchased over 1,000 metric tons of gold in 2024, the third consecutive year of significant buying and double the average annual purchase of the past decade.

Central banks in China, India, Kazakhstan, Uzbekistan and Poland have continued their aggressive gold acquisitions in 2025, driven by concerns over geopolitical risks and de-dollarization efforts.

The freezing of Russia’s US$300 billion in foreign reserves after its 2022 invasion of Ukraine is widely seen as a catalyst for central bank buying as it underscored the risks of holding assets in foreign currencies or overseas institutions.

With geopolitical uncertainties persisting and potential tariff escalations under the Trump administration, central bank demand is expected to remain strong. Investor behavior has also been influenced by economic instability, global trade tensions and expectations of US Federal Reserve rate cuts.

Statistics from the World Gold Council show that global gold exchange-traded funds saw US$9.4 billion in inflows in February, the highest monthly intake since March 2022.

How high can the gold price rise?

Gold continued to hold above US$3,010 as of Tuesday (March 25), and its resilience at the psychological US$3,000 support level suggests demand for safe-haven assets remains intact.

Instability remains high as investors speculate about US tariffs, which are set to go in effect on April 2.

Investment firm UBS (NYSE:UBS) recently raised its gold price forecast to US$3,200 over the next four quarters, citing persistent geopolitical risks and a prolonged trade conflict.

Within the gold sector, many experts have laid out much higher long-term gold price predictions.

23andMe faced security concerns prior to bankruptcy

Beyond financial struggles, 23andMe has faced growing concerns about its handling of consumer data.

In October 2023, hackers accessed the personal information of nearly 7 million customers over a five month period, raising alarm among users and regulators.

California Attorney General Rob Bonta issued a consumer alert last week urging residents to consider deleting their genetic data from 23andMe’s platform due to privacy risks.

The data breach compounded the company’s existing troubles, further damaging its reputation and diminishing consumer trust. 23andMe eventually reached a US$30 million settlement in a lawsuit related to the breach late last year.

In response to concerns about how genetic data will be handled during the bankruptcy process, 23andMe has stated that there will be no changes to its data storage, management or security policies.

However, reports have highlighted that 23andMe’s privacy policies allow for the potential sale of customer data to third parties, raising further questions about how data may be managed under new ownership.

23andMe’s struggles reflect broader challenges facing the consumer DNA testing industry. Rival AncestryDNA, owned by private equity firm Blackstone (NYSE:BX), has also seen a decline in demand.

DNA test kit sales have historically spiked during the holiday season, but consumer interest has waned in recent years. The long-term viability of genetic testing companies has come into question, as privacy concerns and a lack of recurring revenue models present significant obstacles.

In response to its financial difficulties, 23andMe implemented significant cost-cutting measures, including laying off 200 employees and halting development of its therapeutics division.

How to invest during stagflation

Canada’s GDP contracted by 1.4 percent in 2024, marking the second year in a row where it shrunk by over 1.2 percent. Contributing factors were declining labor productivity, a struggling housing market and trade disruptions.

In 2022 and 2023, nationwide productivity saw six consecutive quarters of decline, which hindered economic growth, while housing affordability challenges persisted, with prices surging far beyond income growth.

Meanwhile, US tariffs implemented this month have further strained exports, contributing to an estimated 2.5 to 3 percent GDP decline. Combined, these factors have weakened the country’s economic momentum.

“In effect, the tariffs are like the straw that broke the camel’s back,” Johnston explained.

“Investors were probably willfully ignoring the stagflation risk, with hope it would go away, or dissipate or gradually improve. But I think now the tariffs have just made it unambiguous.”

Amid the widespread volatility, Johnston recommends investors “arm” themselves through a series of questions.

“The average investor in the last 20 years has effectively been long middle-class demand, long growth and short inflation,” he said. This strategy aids portfolio growth if there is no inflation and middle-class demand remains robust; however, that is not the current market landscape.

“They need to start now looking at their portfolio and saying, ‘I need to have things in there that generate returns, (that) are effectively short growth and long inflation.’ They will flourish in this stagflationary world,” said Johnston.

In a stagflationary environment, Johnston suggests investors ask themselves if their investments are long growth and short inflation, and if the investments rely on robust middle-class demand.

“Because in a stagflation world, the middle class comes under a lot of pressure,” he said.

“During stagflation, you see a big contraction in people who are in the middle cohort of incomes, and you tend to see the very wealthy and very poor grow in size.”

So which investments are short growth, long inflation? Johnston shared three investments that fit within that strategy.

1. Farmland provides greener pastures

“An example of something that is short growth, long inflation is farmland. Farmland is short growth because people don’t change their dietary behavior,’ Johnston said.

‘They don’t change their (food) consumption during a recession.”

Farmland is also a real, non-depreciating asset that can hedge inflation, as shown by past performance.

“In the 1970s, farmland went up 400 percent during the stagflation,’ the expert continued.

‘It beat inflation by 275 percent in real terms — it outperformed by a long shot, by an order of six or seven times public equities, bonds and commercial real estate.’

Canada houses nearly 65 million hectares of farmland and is the fifth largest agricultural exporter globally. The nation is also the top producer of potash, a key ingredient for soil health and crop growth.

2. The long automotive value chain

The electric vehicle (EV) market has been a top investment segment for the last five years as investors look to secure profits up and down the EV supply chain. As outlined by the International Energy Association, one in five cars sold in 2023 was an EV, and the market share for EVs is forecast to grow over the next decade.

In fact, since 2019, EV-related stocks — including automakers, battery manufacturers and battery metals companies — have outpaced broader markets and traditional carmakers. Between 2019 and 2023, these companies saw higher relative returns on investment, with the market capitalization of pure-play EV makers surging from US$100 billion in 2020 to US$1 trillion by the end of 2023, peaking at US$1.6 trillion in 2021.

Battery manufacturers and battery metal companies also experienced significant growth over the same period.

Now, with 100 percent tariffs on Chinese-made EVs and the North American economy in disarray, Johnston suggests looking elsewhere in the automotive value chain for investment opportunities

‘But during stagflation, you don’t want to be invested in the auto sector, because you tend to find the demand for cars is stagnant, or even contracts. So you’re better off investing in automotive maintenance.’

He explained that investing in automotive maintenance can be a strong strategy during stagflationary times, as demand for repairs rises when people keep their cars longer. While maintenance growth aligns with the economy in normal economic conditions, during stagflation it outpaces GDP growth. As vehicle lifespans extend, the need for repairs increases, making the sector resilient even in periods of weak growth and high inflation.

Today, the automotive services and maintenance service sector could benefit from US President Donald Trump’s plans to re-industralize America’s economy, amid threats to shut down Canada’s auto sector. This move could prove disastrous for Ontario and Québec, two provinces that serve as North American manufacturing hubs.

“(The US) is going to pull the automotive sector out of Canada — to the extent that they can — and of course we’ll be buying cars from US producers with a weak currency. So the price of cars in Canadian dollar terms will go up. That’ll also force out the period of time that people own their existing cars,” he said.

‘That’s terrible for Canada, but it’s good for that particular (maintenance) industry.”

3. Opportunity in mandatory services

The last investment area Johnston suggested is environmental services.

Unlike other industries, the environmental services sector’s expansion is being driven by regulatory changes rather than economic conditions, making it highly resilient to recessions and inflation.

“The pricing of these services tends to increase rapidly in inflationary times, because these are non-discretionary services,” he said. “If the regulation is there, you have to comply. You have to buy the services.”

Demand remains steady since businesses must comply with environmental regulations, giving companies in the sector strong pricing power.

Ultimately, as inflation persists, investors may benefit from shifting focus toward industries like farmland, automotive maintenance and environmental services, which thrive in different economic conditions.

1. China

Rare earths production: 270,000 metric tons

In 2024, China’s domestic output of rare earths was 270,000 metric tons, up from 255,000 metric tons the previous year.

As mentioned, China has dominated rare earths production for quite some time. While China dominates global production of the vast majority of the 17 different rare earth elements, its output is heavily concentrated in light rare earths, specifically the magnet rare earths neodymium and praseodymium.

The largest rare earth mining company in the world is China Northern Rare Earth High-Tech (SHA:600111), which owns the prolific Bayan Obo rare earth mining complex in Inner Mongolia.

Chinese producers must adhere to a quota system for rare earths production. Interestingly, this system has led China to become the world’s top importer of rare earths since 2018.

The quota system is a response to China’s longstanding problems with illegal rare earths mining. For more than a decade, the country has taken steps to clean up its act, including shutting illegal or environmentally non-compliant rare earths mines, and limiting production and rare earths exports.

China’s rare earths industry is controlled by state-owned miners, in theory allowing China to keep a strong handle on production. However, illegal rare earths extraction remains a challenge, and the Chinese government continues to take steps to curb this activity.

The Chinese government is set to introduce even tougher regulations requiring companies involved in the mining, smelting and trading of rare earths to maintain detailed records of product flow and input this data into a traceability system. These new regulations took effect in October of 2024.

2. United States

Rare earths production: 45,000 metric tons

The US produced 45,000 metric tons of rare earths in 2024, up from 41,600 metric tons in the previous year.

Rare earths supply in the US currently comes only from the Mountain Pass mine in California, which is owned by MP Materials (NYSE:MP). Mountain Pass is producing high-purity neodymium and praseodymium (NdPr) oxide, a key material for high-strength neodymium iron boron (NdFeB) magnets.

The mine has had an interesting decade. Previously owned by Molycorp, the mine was put on care and maintenance in 2015 due to low rare earths prices and Molycorp filing for bankruptcy. Mountain Pass re-entered production in Q1 2018 under its new ownership.

The US is a major importer of rare earth materials. The USGS estimates the value of US rare earth imports for 2024 at US$170 million, down from US$186 million in 2023. The country has classified rare earths as critical minerals, a distinction that has come to the fore due to trade issues between the US and China.

Aiming to bolster its domestic supply, in May 2024, the US Biden administration announced a 25 percent tariff on rare earth magnet imports from China that would go into effect in 2026.

New US President Donald Trump is keen on securing the nation’s critical minerals and rare earths supply chain, going so far as to threaten annexation of Greenland and Canada, both home to significant reserves of rare earths and other critical minerals. He also made access to rare earths a major sticking point in a defense deal with Ukraine.

3. Myanmar (also known as Burma)

Rare earths production: 31,000 metric tons

Myanmar produced 31,000 metric tons of rare earths in 2024. This was a decrease of more than 27 percent from the 43,000 MT of rare earths Myanmar mined in the previous year, but still up more than 158 percent from the 12,000 the nation produced in 2022. Supply was down that year due to a temporary halt in production associated with the turmoil following the 2021 military coup.

Myanmar’s rare earths industry is plagued with controversy as much is reportedly carried out by unregulated small-scale miners and linked with armed militia groups with no environmental best practices or remediation plans in place. Ironically, the act of mining these metals critical for clean energy technologies such as EVs and wind turbines is itself fraught with environmentally destructive practices that are harming the waterways, wildlife and vegetation in Myanmar.

China, who shares a border with Myanmar, obtains 70 percent of its medium to heavy rare earths feedstock from its neighbor, including dysprosium and terbium. Myanmar’s rare earths production, and hence China’s feedstock supplies, experienced further disruptions in late 2024. Myanmar’s Kachin Independence Army seized two towns in Kachin state, near China’s Yunnan province, which are critical suppliers of rare earth oxides to China. This includes Panwa, a key rare earths mining hub.

4. Australia

Rare earths production: 13,000 metric tons

In 2024, Australia’s rare earths production came in at 13,000 metric tons, down from 16,000 metric tons in the previous year. That’s compared to the 24,000 metric tons produced in 2021. The country holds the world’s fourth largest rare earths reserves and is poised to increase its output.

Through Geoscience Australia’s Critical Minerals Research and Development Hub, the Government of Australia is looking to accelerate development of the nation’s rare earths resources. Additionally, the government’s National Reconstruction Fund has committed AU$200 million for the development of Arafura Rare Earths’ (ASX:ARU,OTC Pink:ARAFF) Nolans rare earths project in the Northern Territory, as well as AU$400 million to Iluka Resources (ASX:ILU,OTC Pink:ILKAF) for the construction of its Enneaba rare earths refinery in Western Australia.

The leading producer of rare earths outside of China, Lynas Rare Earths (ASX:LYC,OTC Pink:LYSCF) operates the Mount Weld mine and concentration plant in Western Australia. Mount Weld ranks among the world’s top rare earth mines. Lynas is slated to complete its expansion project to boost annual production of NdPr products to 12,000 MT in 2025.

Australian company Northern Minerals (ASX:NTU,OTC Pink:NOURF) is undertaking a feasibility study for its Browns Range mining and process plant; the study is due for completion in Q4 2025. Browns Range’s main products will be heavy rare earths terbium and dysprosium.

5. Nigeria

Rare earths production: 13,000 metric tons

Nigeria’s rare earths production in 2024 was 13,000 metric tons, up more than 80 percent over the previous year’s output level. The African nation is a newcomer to the ranks of the top 10 rare earths producing nations. As Nigeria’s rare earths mining industry is still in the early stage of its development, little is known about the extent of its rare earths reserves at this time.

In late 2024, the government of Nigeria signed a memorandum of understanding with the government of France to jointly develop critical minerals including rare earths.

6. Thailand

Rare Earths production: 13,000 metric tons

Thailand’s rare earths production came in at 13,000 metric tons in 2024, up a whopping 261 percent from the prior year. The country’s rare earth production has ramped up rapidly in recent years — Thailand’s output of rare earths in 2018 was just 1,000 metric tons.

While there’s not much information available on Thailand’s rare earth industry, the country is a major source of rare earth imports for China. As far as downstream rare earths product makers, Neo Performance Materials’ (TSX:NEO) subsidiary Neo Magnequench operates a rare earth magnetic materials manufacturing facility in Korat, Thailand.

Chinese electric vehicle giant BYD (OTC Pink:BYDDF,HKEX:1211,SZSE:002594) opened a US$486 million EV manufacturing facility in the country last July. The Financial Times reports that ‘analysts expect Chinese EV makers to penetrate further into south-east Asia because Thailand has lower tariffs on fully assembled EVs for companies that have pledged to build EV factories there, and most of them are Chinese.’

7. India

Rare earths production: 2,900 metric tons

India’s 2024 production was 2,900 metric tons, unchanged from the previous few years. The country’s output represents less than 1 percent of global rare earths supply. India’s rare earths production is far below its potential, considering the nation holds almost 35 percent of the world’s total beach sand mineral deposits, which are significant sources of rare earths.

India joined the Minerals Security Partnership (MSP) in mid-2023, a multi-nation group led by the United States and focused on the creation of critical mineral supply chains, including for rare earths.

Much of the country’s rare earth exploration and mining is being conducted under the auspices of the Government of India via IREL, which was formed as Indian Rare Earths Limited in 1950. Furthermore, the government is establishing research and development into new technologies for extracting and processing rare earth minerals.

8. Russia

Rare earths production: 2,500 metric tons

Russia produced 2,600 metric tons of rare earths in 2024, nearly the same level as the previous six years. In terms of global rare earths reserves, Russia ranks fifth.

Prior to the country’s aggressive war against Ukraine, the Russian government was allegedly “unhappy” with its supply of rare earths. The Russia-Ukraine war has raised concerns over disruptions to the US/Europe rare earths supply chain.

Russia has reportedly reduced mining taxes and offered discounted loans to investors in nearly a dozen projects intended to increase the nation’s share of global rare earths production from the current 1.3 percent to 10 percent by 2030.

The country’s largest rare earths deposit, Tomtor, is currently being developed by TriArk Mining, a joint venture owned by industrial conglomerate Rostec and billionaire Alexander Nesis. However, in November 2024 Reuters reported that Russian President Vladimir Putin accused the company of delaying its development and suggested partnering with a third party, such as the state, or raise investment.

In late February 2025, Reuters reported that the Russian government has signaled to the Trump Administration that it is interested in a rare earths development deal with the US.

9. Madagascar

Rare earths production: 2,000 metric tons

Madagascar produced 2,000 metric tons of rare earths in 2024, nearly on par with the previous year’s 2,100 metric tons of output and down dramatically from 6,800 metric tons in 2021.

The country’s Ampasindava peninsula is reportedly home to 628 million metric tons of ionic clays with a significant concentration of rare earths, particularly dysprosium, neodymium and europium. It’s considered one of the largest rare earth deposits outside China. Whether or not it is ever developed is up in the air.

The declining in rare earths production in recent years is due in large part to increasing opposition to rare earths mining on the part of farmers who are strongly against mining activity in their communities.

In April 2024, Energy Fuels (TSX:EFR,NYSEAMERICAN:UUUU) agreed to acquire Base Resources and its advanced Toliara heavy mineral sands project in Southwest Madagascar. Energy Fuels plans to separate monazite sands from Toliara’s Ranobe deposit at its White Mesa mill in Utah, US.

10. Vietnam

Rare earths production: 300 metric tons

Vietnam’s rare earths production came in at 300 metric tons in 2024, on par with the prior year’s output. However, it’s down 75 percent from the 1,200 metric tons produced in 2022. Vietnam holds the world’s sixth largest known rare earths reserves, including several rare earth deposits against its northwestern border with China and along its eastern coastline.

The country’s government is interested in building its clean energy capacity, including solar panels, and is said to be looking to produce more rare earths for its supply chain for that reason. It has set a goal of extracting and processing 2 million metric tons of rare earths per year by 2030.

However, serious corruption charges in October of 2023 that led to the arrests of top industry executives, including the chairman of Vietnam Rare Earth JSC, has hamstrung those plans. ‘The arrests stalled government plans to auction new rare earth mining concessions and cast a cloud of uncertainty over the industry that has given foreign investors pause,’ reported Asia Times.