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Stephen Gorenstein: Why war hasn’t shifted fundie’s view on gold and critical minerals

• The economic fallout of the Iran War is yet to be fully felt in the West
• Investors sold out of bullion and gold stocks throughout March, joining the rout in equities
• Fund manager Stephen Gorenstein believes the cases for gold and critical minerals remain strong

There remain uncertainties for the global economy coming out of the Iran War, even if a two-week ceasefire announced Wednesday Aussie time turns into something longer lasting.

After weeks in the bunker, contemplating a risk averse sell-down that tanked global stock indices, gold, silver and more, traders are now planning for how the war is changing their assumptions.

For the stock pickers at the SGH Ari Fund, the theses that powered their portfolio positioning in gold and critical minerals – leading to a 95.4% gain in CY2025 – remain in tact.

It’s been a tougher start to 2026 for fundies leveraged to gold. After hitting records of around US$5500/oz in late January, the precious metal copped two blows.

Traders were first spooked by the announcement that Kevin Warsh would follow Jerome Powell as US Fed chair.

Though his criticism of Fed monetary policy has skewed toward its balance sheet, there are fears a reputed ‘hawk’ could swing the pendulum away from what most gold bugs assumed was a coming easing cycle.

The savage hit to gold from that shock was compounded by the war in Iran and effective closure of the Strait of Hormuz.

While gold’s price drop has been explained as a liquidity event – losses elsewhere are being covered by sales of a liquid asset – higher oil prices also fuel inflation.

Too much of that and the Fed could view cuts as too risky, even if Donald Trump wants cheaper rates for American voters ahead of November’s mid-terms.

But Ari investment manager and managing director Stephen Gorenstein believes US rate cuts are still on the agenda.

“Despite the ructions and the oil price moves that we’ve seen, we don’t think that’s changed anything, we do think that the interest rate cycle will continue to be in a cutting cycle over the course of this year,” he said.

“So that’s going to be constructive for gold. And then the second thing is central bank buying.

“We have seen some central banks selling in the last little while, specifically Turkey. That’s for liquidity reasons. We see other central banks as buyers and we think that will continue.”

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Source: Stockhead