An Established Exploration Company to Play Gold’s Ongoing BULL Market

Contents

• The U.S. Dollar Is Weakening


• Losing the Reserve Currency Status


• Lower Interest Rates Should Further Support Gold


• Central Banks Support Gold at Record Levels


• How to Play This Bull Market in Gold


• Reconsider Your AI Plays and Look at Gold Juniors


• The Catalysts Could Drive Gold Juniors Higher


• Focus on High-Quality Companies in the Gold Space


• A project located close to Rackla’s claims has recently been estimated to host over seven million ounces of gold.


•  Takeaway


• Rackla Metals: The Next Snowline? Big Gold Potential in the Yukon - an interview with Simon Ridgway

  

Gold has been one of the best-performing assets this year.

Recently, it broke the nominal price record of $2,800 an ounce… Over the past year, it has soared by 46%. It delivered more than twice the performance of the S&P 500 index. The index rose by just 22%.

Yet this may not be the end of the rally. In fact, it could continue for years.

Wall Street agrees… Gold performs well during periods of uncertainty, and over the past several weeks, there has been plenty of it. Trade wars, worsening relationships with allies, and talks of geographic expansion by the U.S. administration put investors on high alert.

As a result, gold kept climbing up. In fact, investors started buying so much of it that market participants needed to queue up to borrow enough metal to trade.

Right now, traders need to wait up to four weeks to get their borrowed bullion from the Bank of England, for example. Usually, it takes just several days.

The demand for gold, in other words, is incredible. Yet, you don’t read much about it in the mainstream financial media.

And most of this gold is flowing into the U.S. So much so that gold inventories in New York surged to multi-year highs… and short positions in gold futures (investors who are “short” an asset benefit when its price declines) have fallen to their lowest level since 2020.

In other words, investors are incredibly bullish on gold.

This tells us that the demand for gold is growing, and by massive amounts. Both the metal itself and the companies involved in its exploration and production should be at the top of investors’ watchlists.

Here’s why.

The U.S. Dollar Is Weakening

Gold is a monetary metal. A lot of investors think of it as the “anti-dollar.”

And gold’s recent performance proves that they are right.

Just this year, gold is up almost 10%. The U.S. Dollar Index, on the other hand, is down 2.5%.

As it often does, gold has been preserving value while the U.S. dollar is losing it.

And the U.S. dollar is going to take one hit after another in the years to come.

First, tariffs. When the U.S. imposes tariffs on other countries, and they don’t reciprocate, the value of the U.S. dollar grows.

But that hasn’t been the case. When the White House imposed tariffs on Canada and Mexico, they responded. They started a trade war.

And trade wars create uncertainty and undermine the global status of the U.S. dollar.

This is why alternative assets such as gold have been soaring. The world has become too risky to operate in, and the leading global economy could be headed into a long and painful trade spat even with its closest allies.

Second, the U.S. dollar looks overvalued and could be due for a correction. Bank of America analysts say that the U.S. dollar reached a 55-year high at the end of 2024. This is not sustainable. A correction looks more likely than a rally at this point.

Third, the White House may inadvertently damage the country’s economic growth with its policies. It’s true that the current administration values growth, but its recent actions have not been pro-growth at all. In other words, you can’t be both pro-growth and against trade. So far, we’ve seen a lot of the latter.

But the final blow to the U.S. dollar could come from elsewhere…

Losing the Reserve Currency Status

Dollar is still an undisputed leader when it comes to international trade.

But this could change, and soon…

First, the U.S. has already undermined its reputation as a reliable economic and military partner. In the coming years, it could do even more damage to its reputation.

Second, it will create a window for other countries, such as China and the E.U., to step in and fill some of the void opened by the U.S.

The world is facing a war in Europe and ongoing trouble in the Middle East. Countries are looking to collaborate, not alienate each other.

This creates opportunities for non-U.S. governments to build economic and military alliances—and to strengthen the roles of their local currencies.

For example, since 2014, the U.S. dollar has lost five percentage points of its global reserve share. In 2024, the U.S. currency represented 58% of the official foreign exchange reserves.

This trend could accelerate over the next four years. This would also be bullish for gold.

The dollar is also used less and less in global commodities trading. Specifically, in energy.

And new “financial technology” payment systems don’t always involve U.S.-based banks. This also works against the U.S. dollar as the world’s dominant currency.

And it continues providing a massive boost for gold and gold stocks…

But there are other forces at play.

Lower Interest Rates Should Further Support Gold

The price of gold and interest rates tend to move in opposite directions. Some investors view gold as an asset that “has no yield,” which means that if the U.S. Treasuries provide them with plenty of income, they will stay away from gold.

There are two problems here.

First, interest rates in the U.S. are declining. The U.S. inflation seems to be under control for now, and the Fed has started lowering interest rates.

The White House has been pressuring the Fed to lower rates further to support growth. Even though the Fed is relatively independent of the current administration, it could need to drop interest rates further if trade wars result in an economic slowdown.

Second, the U.S. Treasuries may not enjoy their safe-haven status for much longer. The U.S. government has been acting in a way that damages the country’s reputation—and makes investors doubt whether the U.S. debt will stay almost risk-free forever.

The total debt of the U.S. government stands at about $36 trillion… In 2024, it represented 99% of the country’s gross domestic product.

By 2054, this number could climb to 166%.

But it could reach that level even earlier. During the first Trump administration, the government accumulated $7.8 trillion of gross federal debt.

Before he took office, Donald Trump floated the idea of abolishing the national debt ceiling. This is a signal that this administration may not think twice about adding trillions of dollars more to the national debt pile.

If this happens, it won’t really matter how low interest rates are. Interest costs will surge, which will raise the risk of a credit downgrade… And if that happens, investors could start buying gold like they have never done before.

This could provide a boost to both the metal itself and to the companies leveraged to it.

But there’s another factor that, in our view, could boost the price of gold further.

Central Banks Support Gold at Record Levels

Central banks have been adding massive amounts of gold to their reserves.

For the third year in a row, central banks bought over 1,000 t of the metal. As of 2024, their buying streak has now been extended to 15 years.

This buying has pushed the total global demand for gold to a record high of 4,974 tons.

World Gold Council has described global central banks’ demand for gold as “insatiable.” The Bank of Poland alone added 90 tons of gold to its reserves last year.

The second biggest buyer was the Bank of Turkey, which added 75 tons of gold to its reserves.

Central banks usually have a long-term investment horizon. They use gold to protect their balance sheets against currency volatility and political uncertainty.

Judging by the amounts of gold they purchased, and their continued buying, 2025 should be another great year for gold.

Also, most of this buying came from emerging markets’ central banks. As the global trade war continues, they will feel its impact the most. So, they have a lot of motivation to shore up their balance sheets and de-dollarize them.

They are also more likely to add more non-US currencies to their holdings. They are more open to China’s drive to become their trade and financial partner of choice.

None of this is good for the U.S. dollar, but it’s a catalyst for gold.

How to Play This Bull Market in Gold

As we said, gold soared by 46% over the past 12 months.

But there is a group of companies that have delivered an even better performance.

Junior gold stocks have outperformed the metal itself. Over the past year, an exchange-traded fund that tracks these companies returned 64%.

This is not unusual. Junior resource companies are “leveraged” to the price of gold. They tend to move in tandem with the metal and outperform it when its price goes up.

That’s exactly what happened, and this trend has continued into 2025.

This year, gold is up 9.1%. And junior gold companies are up 15.2%.

Importantly, both gold and gold juniors have crushed the performance of the much-talked-about NASDAQ.

NASDAQ has risen by just 3.6% this year.

In other words, while everybody is talking about AI and tech stocks, gold juniors have delivered four times the performance of NASDAQ this year.

This trend could continue…

Here’s why.

Reconsider Your AI Plays and Look at Gold Juniors

Most investors have exposure to AI and tech at this point.

And they might consider rebalancing their portfolios out of this sector.

First, the AI rally has been going on for a while now. Most of the early-stage opportunities in this space are overvalued and overcrowded.

There are other sectors that could deliver performance and diversification benefits without the unpredictability of the tech space.

Second, the AI revolution has been disrupted by new entrants that seem to have achieved high-quality results in model training without spending much.

DeepSeek, a Chinese startup, set the AI world on fire when it released a model that performs as well as some of the leading ones created in the U.S. but at a fraction of their cost.

DeepSeek says that it created its model with just $5.6 million. For comparison, OpenAI will likely spend $7 billion training its ChatGPT models just this year.

This isn’t to say that the AI revolution is over…

On the contrary, it’s accelerating. But AI efficiency doesn’t necessarily translate into portfolio returns.

Investors should be aware of this.

They should also consider the sectors that provide a different risk-return profile than that of the much-hyped tech.

The Catalysts Could Drive Gold Juniors Higher

Junior gold companies, such as Rackla Metals (TSX-V:RAK), have plenty of upside potential going into 2025.

The first catalyst, and the most powerful one, is the ongoing massive bull market in gold. Both Wall Street and individual investors agree that gold is headed for new highs this year.

Goldman Sachs, for example, predicts that gold could reach $3,080 per ounce by the end of the year.

As we showed before, junior gold stocks can potentially deliver higher returns than gold itself. As a reminder, over the past 12 months, they have outperformed gold by a factor of two.

The second catalyst is lower interest rates. They are poised to decline both in the U.S. and in Canada, which could make capital more accessible to these early-stage exploration and development companies.

Interest rate futures are pricing in two interest rate cuts this year. In the U.S., the market expects the Fed to cut interest rates potentially down to just 3%. This could make much more capital available to gold-focused juniors.

Which ones should you pay attention to?

Focus on High-Quality Companies in the Gold Space

To leverage the ongoing bull market, investors should focus on the most promising companies in this area.

Canada-based gold juniors such as Rackla Metals (TSX-V:RAK) could add diversification benefits to investors and potentially help them play the gold rally.

Rackla is focused on the Yukon and Northwest Territories, which are some of the most prolific and mining-friendly jurisdictions in Canada.

The company owns an impressive land portfolio of 63,000 hectares with multiple exploration targets.

Most of these targets are located within the Tombstone Gold Belt, an area that extends for over 1,000 kilometers.

This belt hosts several multi-million-ounce projects with the same geology as the one Rackla targets. The 12-million-ounce Fort Knox mine in Alaska, the 8.8-million-ounce Eagle Gold, and the 2.2-million-ounce Brewery Creek mine all belong to the same category, Reduced Intrusion-Related Gold System (RIRGS).

A project located close to Rackla’s claims has recently been estimated to host over seven million ounces of gold.

In two exploration seasons, it went from discovery to one of the largest initial resource estimates in Canada.

In response, the project owner’s market capitalization increased by about 80 times.

(Please note that we don’t claim that Rackla’s properties or market performance will achieve the same results. Please read our disclaimer for details.)

One of the company’s key projects is the Grad property in the Northwestern Territories.

Rackla used past survey data produced by government studies to identify potential exploration targets. By using existing data, Rackla also lowered its own exploration cost.

Rackla Metals (TSX-V:RAK) conducted an initial grassroots exploration program, which involved stream sediment sampling and prospecting.

The company has already identified a potential target at Grad. It’s called the BiTe zone, and sampling at the zone delivered results of up to 7.5 grams per tonne of gold.

Some samples featured even higher grades. The company identified grades as high as 92 grams per tonne of gold.

One of the longest intervals that the company identified at BiTe was 38 meters of 1.8 grams per tonne of gold.

Rackla’s CEO Simon Ridgway commented on the discovery: “An increasingly compelling RIRGS target is emerging at the BiTe zone. We are impressed with the strong geochemical correlation of gold with bismuth and tellurium in rock, chip-channel and talus-fine samples. These results would be considered impressive in any part of the Tombstone Gold Belt.  Based on the results of our early exploration, we have greatly increased the size of our property around the BiTe zone and it will be our priority when the team returns to the field for more advanced exploration in 2025.”

The company has finished its 2024 exploration program. It was a success due to the discovery of BiTe. Rackla is now focused on this area, which has the potential to host high-grade gold mineralization.

The company is also working on getting the necessary permits for its 2025 program.

It plans to engage in trenching, mapping, and drilling at BiTe and other targets.

The company is well-financed to conduct this work. Last November, it completed a C$1.2-million private placement from a single investor.

As of January, the company’s treasury included C$3.5 million in cash.

In our opinion, this capital will provide Rackla with enough resources to engage in potentially company-defining exploration campaigns at its numerous properties.

In other words, Rackla has been successful at doing early-stage work on its massive land package and raising funds to support this year’s exploration activities.

The team driving this success consists of some of the most experienced professionals in the resource sector.

The company’s CEO is Simon Ridgway. He is one of the most respected and experienced mining professionals. Mr. Ridgway has been involved in mineral exploration since the 1970s, having started out as a prospector in the Yukon territory.

Since then, Mr. Ridgway and his team have discovered gold deposits in Honduras, Guatemala, and Nicaragua, as well as silver deposits in Mexico.

On the technical side, the company has the experience of Mr. Scott Casselman, Rackla’s VP Exploration.

Mr. Casselman was the Head, Minerals Geology, with the Yukon Geological Survey. He joined the Survey in 2015.

His career spans four decades and includes work in mineral exploration in Indonesia, Argentina, Turkey, Alaska, and Canada. Mr. Casselman has direct experience working in Canada’s northwest territories, including Nunavut, Northwest Territories, and Yukon.

We believe that the company’s leadership is well-positioned to take it to the next milestone and potentially deliver shareholder value.

Takeaway

Gold has been performing spectacularly well recently. It outperformed mainstream indexes, and the factors that underpin this rally could continue driving gold prices higher this year.

From trade wars to a weaker U.S. dollar and massive buying by the world’s central banks… gold has been enjoying a powerful combination of catalysts.

Investors focused on the next massive trend should take this into consideration. While everybody else has their eyes fixed on the next irrelevant headline, the gold mining sector is the place to be, in our opinion.

Rackla Metals (TSX-V:RAK) has access to a giant 63,000-hectare land package where it has already outlined what looks like high-grade and high-potential targets.

The company operates in mining-friendly jurisdictions and has some of the most trusted and respected professionals on its team.

Plus, it’s well-financed to deliver on its next exploration milestones.

Watch the video below to learn more about Rackla Metals from CEO, Simon Ridgway.

Rackla Metals: The Next Snowline? Big Gold Potential in the Yukon - an interview with Simon Ridgway

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