The Charts of The Week: Casino Markets, Record Gold Inflows, B.C. Porphyries & Nevada Gold Mining Rumors

Another eventful week across the precious metals & mining sectors concluded with rumors of a mega-deal with Newmont making a move for Barrick's Nevada gold assets.

We begin this edition of “Charts of the Week” with several charts that illustrate the growing amount of risk-taking across markets. The casino-style market environment—characterized by the proliferation of leveraged ETFs and zero-days-to-expiration (ODTE) options trading—is unfolding alongside a rising complacency toward risks facing the U.S. economy and financial markets.

In a casino, it’s important to offer customers many ways to part with their money. Since 2021, Wall Street has more than doubled the number of leveraged equity ETFs, providing market speculators with more avenues than ever before to layer on risk.

Meanwhile, hedge funds are ratcheting up the gross leverage:

Source: Goldman Sachs

Gross leverage measures total exposure — the sum of long and short positions — relative to the fund’s or investor’s equity (NAV). A gross leverage level of 220% is extraordinarily high, setting the stage for a major unwinding of hedge fund positions if volatility spikes for an extended period.

Meanwhile, according to a recent Bank of America global fund manager survey the net percentage of respondents saying a global recession is likely is the lowest since February 2022.

Remember what happened in February 2022? And how quickly people changed their minds on the likelihood of recession?

As one of its key pieces of negotiating leverage, China has been putting the squeeze on U.S. rare earth imports in 2025:

What changed in 2025?

Well, I think we all know the answer to that. We are sure to have not seen the last of China using its domination of the global rare earth supply chain as leverage to achieve its objectives in other areas of trade and geopolitics.

The US/China trade deal drama is set to reach new heights next week with the first in-person meeting between Trump and Xi during Trump’s 2nd term—the meeting will take place on the sidelines of the APEC Summit in Malaysia.

Turning to gold and the US dollar, I found this graphic from Apollo Research to be incredibly powerful:

Gold is on the verge of overtaking US Treasuries as the global reserve asset of choice. This is a result of deteriorating trust globally, and another sign that global central banks continue to diversify their holdings away from the US Dollar.

RBC produced an excellent visual showing the current GDX correction in the context of historical corrections in the gold mining sector:

There is a typo in the above chart, it should read “Period analyzed: May 2006-Present”. The median correction for GDX is 17% and it lasts for 81 days. The current correction has already reached exactly -17%:

GDX (Daily)

It’s very likely the current correction has further to go. However, it may become more of a correction through time, rather than price story.

Historically, the gold miners have a tendency to put in an important low in mid-November–this November low tends to be followed by a strong 2-3 month rally into the new year.

I also really like this chart from 3Fourteen Research showing how US investors did not believe in the early 2024 gold breakout:

Western investors have finally caught on to the gold trade, evidenced by gold funds experiencing record inflows over the last four months (+US$50 billion).

Last week, Scotiabank made significant increases to its gold and silver price forecasts. However, Scotia’s 2025-2028 price forecasts are still below today’s spot gold and silver prices. The Canadian bank used a boilerplate rationale for its gold/silver price target increases, saying that “the increase in prices is supported by economic uncertainty, geopolitical uncertainty and strong central bank buying.”

Scotia equity analyst Tanya Jakusconek also upgraded Barrick (NYSE:B), Anglogold Ashanti (NYSE:AU), and Newmont (NYSE:NEM) to sector outperform. Notably, she raised her price target on Barrick to US$43 from US$27.50.

Barrick Mining (Daily)

A report out late in the Friday trading session stated that Newmont is eyeing Barrick’s Nevada gold assets in a potential transaction.

“Denver-based Newmont has a minority stake in a Nevada gold mining joint venture with Barrick, which is operated and majority owned by Barrick. Newmont is in the early stages of considering various transaction structures that would allow it to gain full ownership of the assets, the people said, asking not to be identified because the information is private.

It’s unclear how receptive Barrick would be to any overtures, especially as the Nevada gold mines are considered to be among its most valuable assets. Newmont could consider options including a bid for Barrick’s stake in the venture as well as a full takeover of the company followed by divestments of assets it views as non-core, the people said.”

This is the latest episode in a long saga involving Barrick and Newmont. However, it feels to me like this time could be different, with much better chances for a transaction to happen following the departure of former Barrick CEO Mark Bristow. Three weeks ago, I wrote about this possibility and how I believe it could unfold.

Finally, two stocks really caught my eye in junior mining land this week.

Shares of Metal Energy (TSX-V:MERG) took off like a rocket ship after announcing the acquisition of the NIV Copper Gold porphyry project, located in the Toodoggone district of British Columbia. Additionally, famed B.C. geologist Charlie Greig is the new CEO of MERG.

Metal Energy Corp (Daily)

The NIV Project hosts extensive and coincident soil geochemical, Induced Polarization (IP), and magnetic anomalies in a favorable geological setting that represents one of BC’s most compelling undrilled porphyry copper-gold-molybdenum targets. With permitted drill-ready targets, MERG is definitely one to watch.

Finally, we conclude by going back to Nevada to make note of the powerful uptrend in Nevada hybrid project generator Ridgeline Minerals (TSX-V:RDG, OTC:RDGMF).

Ridgeline Minerals (Daily)

Ridgeline could be benefitting from the combination of two ongoing drill programs at its flagship projects (Selena and Swift), and increased M&A activity/rumors across the state of Nevada. Regardless of what’s fueling the buying pressure, the RDG chart has been one of the steadiest uptrends across the sector over the last two months—RDG was relatively unphased by the violent gold/silver sector corrections over the last week.

Disclosure: Author owns shares of Ridgeline Minerals and Barrick at the time of publishing and may choose to buy or sell at any time without notice.

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The work included in this article is based on current events, technical charts, company news releases, corporate presentations and the author’s opinions. It may contain errors, and you shouldn’t make any investment decision based solely on what you read here. This publication contains forward-looking statements, including but not limited to comments regarding predictions and projections. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. This article is provided for informational and entertainment purposes only and is not a recommendation to buy or sell any security. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDARplus.ca for important risk disclosures. It’s your money and your responsibility.