Deficits, Debasement, and Big Money's Blessing: The 'Perfect Storm' for GOLD

Key Concepts

• Secular Bull Market: A long-term market trend characterized by sustained price increases, driven by fundamental shifts rather than cyclical factors.
• De-dollarization: The reduction of the US dollar’s dominance in international trade and finance, with a shift towards other currencies or assets like gold.
• Basel III: A set of international banking regulations that, in 2023, designated physical gold as a Tier 1 liquid asset, impacting bank capital requirements and gold demand.
• Stack Structures (in Gold Deposits): Multiple, vertically stacked high-grade gold-bearing zones within a geological formation, increasing potential resource size.
• District-Scale Exploration: Exploring a large geographical area for multiple potential mineral deposits, rather than focusing on a single site.
• Tier 1 Liquid Asset: An asset that can be easily and quickly converted into cash with minimal loss of value, as defined by Basel III regulations.

The Emerging Secular Bull Market in Precious Metals

Jesse Day’s “Commodity Culture” features Trey Waser, CEO of Dryen Gold, discussing the current state and future outlook of the gold market. The core argument centers on the emergence of a secular bull market in precious metals, driven by a convergence of cyclical and structural factors. Waser posits that this is a rare phenomenon, comparable to the 40-year bond bull market that began in 1982.

Cyclical and Structural Drivers

Waser identifies several key factors contributing to the gold price surge. Traditionally, gold prices are influenced by cyclical factors like real interest rates and stock market performance. However, these factors are currently behaving atypically. Despite relatively high real interest rates and a strong stock market over the past two years, gold has risen from $2,000 to approximately $2,700 (as of January 19, 2026). This divergence is attributed to powerful structural events.

These structural events include:

• De-dollarization: Accelerated by the 2022 sanctions on Russian assets, central banks are increasingly diversifying away from US Treasuries and into gold. This trend is further exacerbated by tariff policies and the growing comfort of BRICS nations in trading in their own currencies. China’s accumulation of gold reserves is specifically highlighted as a driver of non-dollar trading.
• Deglobalization: A broader trend of reduced international economic integration, contributing to uncertainty and demand for safe-haven assets like gold.
• Geopolitical Instability: Ongoing conflicts (Ukraine, Middle East) and political strife (US immigration, internal political divisions) are creating a risk-off environment that favors gold. Waser notes a shift from the “peace dividend” following the fall of the Soviet Union to a current environment of escalating geopolitical tensions.
• Technological Advances: While not explicitly detailed, Waser mentions technological advances as a contributing factor, likely referring to innovations in gold trading and investment platforms.

The US Dollar’s Resilience & De-dollarization Nuances

Waser cautions against predictions of the immediate collapse of the US dollar. He acknowledges the trend of de-dollarization but argues it’s a gradual process, “little by little, then a little bit more.” He points to the dollar’s overwhelming dominance in global FX transactions (90% of the $8-9 trillion daily volume) as evidence of its continued importance. Replacing the dollar would require approximately $300,000/ounce gold prices, a scenario he deems unrealistic. He frames de-dollarization as a shift in market share rather than a complete abandonment of the dollar.

Institutional Investment & Basel III Impact

A significant shift is occurring in institutional investment towards gold. The implementation of Basel III regulations in July of the previous year, designating physical gold as a Tier 1 liquid asset, is a pivotal development. This allows banks to hold gold against their reserve requirements, increasing its value and making futures contracts comparatively riskier. Waser observes that US banks, including JP Morgan and City Bank, have been adjusting their positions, covering short positions and taking physical delivery of gold. This institutional demand is expected to support a long-term bull market.

Furthermore, Tether, a major stablecoin issuer, has amassed a substantial gold position (comparable to a central bank’s holdings) and is exploring gold-backed stablecoins and royalty acquisitions. While Waser is skeptical of the long-term impact of tokenization, he acknowledges Tether’s influence as a significant gold buyer.

Dryen Gold: Exploration & Strategy

Dryen Gold is an exploration company focused on the Dryen Gold District in Ontario, Canada. Waser details the company’s progress in 2025 and outlines plans for 2026.

2025 Highlights

• Discovery of Stacked Structures: Drilling revealed multiple, vertically stacked high-grade gold-bearing structures within the Gold Rock target area. This significantly expands the potential resource size beyond initial estimates.
• New Discovery at Mud Lake: Exploration identified a promising new target area at Mud Lake, with surface samples yielding high gold grades (up to 3 ounces per ton).
• Positive Results at Sheridan & Henman: Channel sampling and drilling at Sheridan and Henman revealed encouraging results, indicating potential for bulk tonnage deposits (Sheridan) and deposits similar to Nex Gold’s Goldland deposit (Henman).
• Successful Fundraising: Dryen Gold raised approximately $13.8 million through a combination of private placements and warrant exercises.

2026 Plans & Catalysts

• Expanded Drilling Program: A minimum of 32,000 meters of drilling is planned, focusing on Gold Rock, Sheridan, and Henman.
• Gold Rock Focus: 50% of the drilling budget will be allocated to expanding the Gold Rock target area and defining its potential.
• Mud Lake Follow-Up: Drilling will resume at Mud Lake to explore the high-grade surface samples.
• District-Scale Exploration: Continued exploration across the 70,000-hectare property to identify additional targets.

Key catalysts for Dryen Gold shareholders include: continued high-grade drill results from Gold Rock, positive results from Sheridan and Henman, and potential M&A activity.

M&A Outlook & Dryen’s Position

Waser believes the gold mining sector is poised for increased M&A activity. Major and mid-tier producers, having exited the exploration business in the past, lack the expertise and resources for early-stage exploration. Dryen Gold’s strategic location (excellent infrastructure), experienced geological team, and district-scale potential make it an attractive acquisition target. While Dryen is open to strategic partnerships, the board prefers an outright M&A transaction to maximize shareholder value. Waser anticipates a potential exit through M&A in 2027.

Notable Quote

“Cyclical factors that have always affected gold prices combined with long-term structural events are merging in real time. They are converging on the world economies in tectonic fashion, creating a structural and fundamental background that supports a secular case for owning gold and silver for the foreseeable future.” – Trey Waser, CEO of Dryen Gold.

Conclusion

The interview paints a bullish picture for the gold market, driven by a unique combination of cyclical and structural forces. The implementation of Basel III, de-dollarization trends, and geopolitical instability are creating a favorable environment for gold investment. Dryen Gold, with its promising exploration properties and experienced team, is well-positioned to benefit from this emerging secular bull market, potentially leading to significant shareholder value through exploration success and eventual M&A activity. Waser’s caution regarding market frothiness and the importance of strategic investment underscores the need for careful due diligence in the current environment.