Editor’s Note
This article highlights the recent volatility in rare earth stocks, exemplified by a major U.S. ETF’s sharp gains and subsequent steep decline. It underscores how sentiment in this sector, initially driven by geopolitical factors, is now being tempered by broader trends in the resource markets.
Rare earth-related stocks have declined. A major US ETF (exchange-traded fund) investing in these stocks saw its market capitalization surge by 70% in less than a month from the start of the year, only to drop by 20% in a single week. While the stocks had been rising against a backdrop of heightened geopolitical risks, the downturn in the markets for other mineral resources like gold and silver has had a spillover effect. A sense of pause has emerged in the previously rising rare earth stock sector.
The market capitalization of the US ETF “VanEck Rare Earth & Strategic Metals ETF,” which includes major rare earth-related stocks, has fallen.
