Gold price softens on US inflation data, still up 3% for the month
Despite the pullback, bullion is on track for a 3% gain this month.
In an effort to support US critical minerals projects, the Biden administration is considering market intervention to counter the crash in prices of lithium and other key minerals caused by overflow of supply from China, POLITICO reported this week.
An official from the Energy Department told the publication that the new policy would involve setting a price floor and agree to pay the difference when market prices fall below that threshold for critical minerals produced in the US.
The new measure would bolster US domestic production of minerals for clean energy technologies and electric vehicles — a major part of the Biden administration’s climate and manufacturing agenda. More importantly, it would lessen America’s reliance on China, which dominates the global supply chain for critical minerals.
“If we move forward on anything like this, the intent would be to give the nudge that is needed to set off the flywheel, versus create a permanent subsidy or cushion for a particular sector or company going forward,” the Energy Department official told POLITICO.
The effort comes on the back of delays and cancellations of several US minerals mining and processing projects, including those that were set to receive a collective $1 billion in grants from the Biden administration.
However, it is unclear how much the policy would cost, according to POLITICO’s report. The details are still being discussed, but the financial backstop would likely be available for a limited time and apply only to projects that the Department has deemed close to being competitive in pricing.
Related: Biden administration aims $2 billion in grants at US electric vehicle transition
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