The United States and Ukraine are about to sign a rare earth mineral agreement, adding another variable to the international situation

On February 26th local time, US President Trump confirmed that Ukrainian President Zelensky will visit the United States on February 28th to sign an important rare earth mineral agreement. This news has attracted international attention, as the agreement not only concerns Ukraine’s efforts to gain support from the United States, but also adds variables to the diplomatic interaction between the United States and Russia.

Difficult negotiations and key points of agreement

The negotiations between the United States and Ukraine regarding the agreement have been fraught with twists and turns. The US Treasury Secretary has proposed that Ukraine hand over 50% of its mineral resources to deepen cooperation and ensure support for Ukraine, with a focus on acquiring key material deposits such as lithium and graphite. Zelensky refused on February 23, citing the lack of “security guarantees” provided by the US and unequal demands for aid and repayment.

After multiple rounds of negotiations, both parties reached an agreement. Ukraine and the United States will establish a “Ukraine Reconstruction Investment Fund”, with Ukraine contributing 50% of the future income from natural resources and related infrastructure. The United States will remove unreasonable investment regulations. Although the agreement does not explicitly state US security guarantees for Ukraine, it mentions a commitment to lasting peace.

The impact on US Ukraine relations and the Russia Ukraine situation

From the perspective of US Ukraine relations, Ukraine regards the agreement as the key to securing security guarantees. Zelensky’s visit to the United States will inquire whether the United States continues to support, whether it can purchase weapons, and whether it can use Russian frozen assets to buy weapons. Trump’s statement that he wants to retrieve funds and make money highlights the United States’ intention to gain economic benefits and maintain influence over Ukraine.

In terms of the Russia Ukraine situation, this agreement may affect the direction of the conflict. The United States is attempting to increase its bargaining power and exert pressure on Russia through this. Russia has always opposed the United States’ resource development and political intervention in Ukraine. The signing of the agreement may exacerbate the conflict between the United States and Russia, and also affect Ukraine’s position in the conflict, making it expect more support to gain an advantage.

The Impact of Geopolitics on the Gold Market

If the market believes that the agreement can promote the peaceful settlement of the Russia-Ukraine conflict, the demand for gold hedging will decline, the price will face downward pressure, and investors will reduce the allocation of hedging assets. On the contrary, if the agreement triggers a strong reaction from Russia, leading to an escalation of geopolitical tensions and highlighting the safe haven nature of gold, the price is expected to rise.

Russia may take countermeasures, increasing investor demand for safe haven and driving up gold prices. In addition, after the agreement is signed, the relationship between the United States and its European allies may change, affecting the global economy and financial markets, indirectly affecting the gold market. If European countries are dissatisfied with the United States monopolizing resources, the adjustment of transatlantic relations will increase market uncertainty and affect investors’ demand for gold.

As February 28th approaches, investors should closely monitor the progress of the signing of the US Ukraine agreement and its profound impact on geopolitics and financial markets, especially the gold market.