Industrial and Precious Metals: A Strategic Hedge Against Geopolitical Risks in the US-China Trade Landscape

The escalating US-China trade tensions in 2025 have transformed industrial and precious metals into critical assets for mitigating geopolitical risk. As both nations vie for technological and industrial supremacy, the interplay between supply chain vulnerabilities, strategic mineral controls, and market volatility has created a unique investment landscape. Investors seeking to hedge against this uncertainty must navigate a complex web of policy shifts, resource nationalism, and macroeconomic pressures.

Industrial Metals: A Battlefield for Supply Chain Resilience

China's tightening grip on critical minerals has become a defining feature of the 2025 trade landscape. According to an , Beijing has imposed de facto export bans on materials like neodymium and dysprosium, essential for advanced manufacturing and defense technologies. These actions, compounded by extreme weather events disrupting mining and hydropower in key regions, have exacerbated global supply chain fragility, the report notes.

The United States has responded with a dual strategy of domestic mining expansion and regulatory reform. The One Big Beautiful Bill Act (OBBBA) aims to streamline permitting for critical mineral projects, yet analysts at the caution that the US lacks sufficient reserves for minerals like gallium and antimony, necessitating long-term alternative sourcing. Meanwhile, the temporary deferral of steep tariffs in May 2025 briefly stabilized industrial metal prices, with copper and zinc seeing short-term gains, according to S&P Global research. However, persistent trade uncertainties and a global economic slowdown have curtailed broader optimism, leaving markets in a state of cautious anticipation.

Precious Metals: Gold as a Safe-Haven Anchor

Gold has emerged as a linchpin for investors navigating the turbulence of US-China trade dynamics. , the World Gold Council noted that gold prices remained elevated despite a temporary easing of tensions, driven by institutional repositioning and central bank demand. .

The October 2025 APEC summit between US President and Chinese President is poised to be a pivotal event. As highlighted by a , even incremental progress in trade negotiations could reduce gold's appeal as a safe-haven asset, . Historical data from previous trade conflicts further reinforces gold's role as a hedge, .

Strategic Implications for Investors

The convergence of industrial and precious metals markets highlights a broader trend: the need for diversified, resilient portfolios in an era of geopolitical fragmentation. For industrial metals, the focus should remain on companies with exposure to and cobalt, particularly those aligned with friendshoring initiatives. Precious metals, meanwhile, offer a counterbalance to industrial volatility, with gold and silver serving as liquidity buffers during trade-related shocks.

However, investors must remain vigilant. China's strategic export controls on materials like germanium and antimony-framed as national security measures but widely perceived as geopolitical leverage-could trigger sudden market corrections, analysts warn. Similarly, the US's reliance on long-lead-time mining projects means domestic supply chain resilience will take years to materialize.

Conclusion

As the October 2025 APEC summit approaches, the interplay between US-China trade dynamics and metals markets will remain a focal point for global investors. Industrial metals are increasingly tied to the geopolitical chessboard, while precious metals like gold continue to serve as a reliable hedge against uncertainty. A balanced approach-combining exposure to critical minerals with safe-haven assets-offers the most robust strategy for navigating this volatile landscape.