Commodities had a wild ride last year, and it’s continued so far in 2026. Trump’s new Project Vault could be a sign of more volatility to come.
The Trump administration’s new critical mineral reserve is meant to secure supply and protect from major price moves, but experts have raised concerns that the reality is that it could ratchet up volatility and be a fresh input for more inflation.
What is Project Vault?
Trump announced Project Vault on February 2, establishing the US Strategic Critical Minerals Reserve.
“Just as we have long had a strategic petroleum reserve and a stockpile of critical minerals for national defense, we are now creating this reserve for American industry,” Trump read in an Oval Office announcement.
The $12 billion reserve is funded by a $10 billion loan from the Export-Import Bank of the United States and $2 billion in private financing.
“This is the first time in the history of the United States we’ve ever stockpiled minerals for our civilian economy,” David Copley, a White House official, said.
GE Vernova, Western Digital, and Boeing are some of the private companies expected to participate in the project.
The details of Trump’s new reserve are hazy…
Project Vault may pose some risk to the commodity market, but the details remain unclear, and that makes pricing in the risk more difficult for investors.
FGS Global strategists noted that the implementation details are “critical,” especially given Trump’s tariff policy and ongoing trade negotiations.
“Project Vault’s top-line priority — fostering the resilience of critical minerals supply chains — is open to several competing interpretations, each with radically different approaches,” partners at Latham & Watkins said.
“This is essentially about taking steps to redesign the market architecture for critical minerals,” international trade lawyer Sahar Hafeez said. “Which minerals are prioritized, how a price floor is calculated, and who signs on—those are the critical next steps.”
…But analysts say suckle up for potential volatility, inflation
The Project Vault reserve is expected to impact on supply and demand dynamics and commodity price moves.
Jefferies’ analyst, Chris LaFemina, said Project Vault’s planned reserve would represent only 1% to 3% of global supply, but flags that stockpiling the US is one of many global powers stockpiling, which threatens to fuel inflationary pressures for commodities and the materials sector.
The analyst highlighted that the $12 billion reserve, unlike the existing oil preserve Trump compared it to, will cost roughly $1 billion annually to maintain. He says this ultimately pushes prices higher, which is felt by consumers in the end.
“So is it inflationary? I mean, look, inflation is driven by a lot of different factors, but this, in and of itself, I think, could potentially become a major inflationary problem,” LaFemina said in a video posted by the firm this month.
LaFemina expects that the recent upward trend in metals will continue, along with “significant” volatility.
Goldman pointed out that Trump’s policies shift commodity markets supply-demand balance to be regionally segmented rather than globally, creating a heightened volatility risk.
They flagged copper as an early example, explaining that prices firmed despite volatility in 2025, as US stockpiling left the rest of the market in deficit amid global oversupply.
Trump’s focus on critical minerals is tied to manufacturing and China
The reserve comes during the Trump administration’s efforts to turbocharge the American manufacturing industry and reduce economic reliance on China.
Commodities like silver, copper, and platinum, some of the 60 USGS critical minerals, have seen dramatic price moves recently. Project Vault is intended to insulate American firms from this volatility and safeguard US interests by reducing reliance on China.
Critical minerals, specifically rare earth minerals, have been a key sticking point of US-China trade talks. China is a dominant player at every stage of the critical minerals industry, from mining to refining, meaning it has a lot of control over pricing.
Goldman Sachs believes that Project Vault’s stockpiling will focus on these rare earth minerals.
Ongoing trade talks and unaddressed sourcing challenges don’t help
Trade negotiations and unclear supply sourcing are among the other uncertainties that could feed market volatility.
FGS Global strategists said some of the tariffs expected from the administration may “amplify commodity price volatility,” adding that the ongoing trade negotiations could stand in the way of a regional critical mineral deal. Trade talks between the US, Mexico, and Canada are set to conclude in July.
Another consideration is China could restrict supply in response to the US’ plans to stockpile. The Trump administration hasn’t explained sourcing plans.
Jefferies lead metals and mining analyst, LaFemina, said.
“Sourcing remains unclear, in the interim the US may have to buy from suppliers it’s trying to avoid (ie. China).”
