Frank Holmes: Next Gold, Silver Price Calls, Plus Top 2026 Asset

Key Concepts

• Gold Price Predictions: Frank Holmes forecasts gold to test $5,000 per ounce in 2026 and reach $7,000 by the end of Trump's term, with silver exceeding $100.
• Modern Monetary Theory (MMT): The theory of printing money faster than economic growth to stimulate the economy, with the expectation of withdrawing it later, which Holmes argues lacks discipline and leads to fiat currency devaluation.
• Gold as an Asset Allocation: Gold has outperformed the S&P 500 for 30 years and is currently underweighted in American portfolios (less than 2% ownership), despite its historical performance and endorsements from investors like Ray Dalio.
• Geopolitical and Military Spending: Increased global military spending, driven by geopolitical tensions and NATO commitments, is seen as a significant driver for resource demand and currency devaluation.
• Silver's Industrial Demand: Silver's crucial role in solar panels and renewable energy is a key factor supporting its price, independent of ESG/DEI mandates.
• Gold and Silver Mining Stocks: These stocks are expected to offer leveraged gains (2-3x the price movement of the metals) and are attracting attention from momentum investors due to revenue and cash flow growth.
• Tether and Stablecoins: Tether, the largest stablecoin issuer, is a significant buyer of US dollars and US government bonds, and is increasingly investing in gold, becoming a major player in the precious metals market.
• Copper as a Strategic Mineral: Copper's demand is driven by military spending, autonomous vehicles, data centers, and renewable energy infrastructure, making it a strategic commodity facing potential supply challenges from China.
• Data Centers and AI: The exponential growth of data centers, fueled by AI and high-performance computing, requires significant amounts of copper and other strategic minerals.
• Secular Bull Market for Resources: Holmes asserts that the market is in a long-term bull market for resources, with significant underinvestment and potential for mean reversion as investors reallocate capital.

Gold and Silver Price Outlook for 2026

Frank Holmes projects significant price increases for gold and silver in the coming years. He anticipates gold will test $5,000 per ounce in 2026 and reach $7,000 by the end of Trump's term. Silver is also expected to surpass $100 per ounce. These predictions are based on several underlying economic and geopolitical factors.

The Role of Modern Monetary Theory (MMT) and Fiat Currency Devaluation

A central argument presented is the impact of Modern Monetary Theory (MMT). Holmes explains MMT as a policy of printing money at a rate two to three times faster than economic growth to stimulate the economy. He argues that the subsequent withdrawal of this fiat money is often not disciplined, leading to a "race to zero" for fiat currencies globally. This inherent devaluation of paper money makes tangible assets like gold and silver increasingly attractive. He notes that gold has outperformed the S&P 500 for the past 30 years, yet remains significantly underweighted in typical American portfolios (less than 2% ownership), contrasting with the 10-15% allocation recommended by successful investors like Ray Dalio.

Drivers for Gold and Silver in 2026

Holmes identifies several key drivers for the anticipated rise in gold and silver prices:

• MMT and Currency Devaluation: The ongoing implementation of MMT policies globally is expected to continue devaluing fiat currencies, pushing investors towards safe-haven assets.
• Shift in Government Spending: There is a notable shift from social welfare programs to significant increases in military spending. This is exemplified by Trump's warnings to NATO allies regarding defense contributions (2% of GDP), leading to a surge in military stocks in Europe and the UK. The push for increased defense spending is expected to be a major capital allocation driver.
• Geopolitical Instability: Events like the Russia-Ukraine conflict have demonstrated the sensitivity of defense-related investments, with significant capital flowing into NATO ETFs.
• Silver's Industrial Demand: Beyond its traditional role, silver is becoming increasingly vital for the solar energy sector. Its use in solar panels is a significant and growing demand driver, independent of ESG mandates.
• Scarcity and Production Challenges: The supply of new gold and silver mines is becoming increasingly difficult, capital-intensive, and time-consuming. It now takes approximately 30 years from discovery to production, compared to 7 years in 1978. This scarcity, coupled with rising demand, supports higher prices.

The Rise of Silver and its Industrial Applications

While gold remains a primary focus, silver is currently attracting significant investor attention due to its recent price surge, nearing the $60 level. Holmes attributes this to its critical role in the solar energy industry. He emphasizes that silver is a transformative component in renewable energy technologies like solar panels. He also notes that China, despite global pushes for ESG and DEI, has continued to build mines and dominate strategic mineral control, including being the largest gold producer and buyer. This strategic acquisition of gold by China is aimed at legitimizing its currency and catching up to the US's gold reserves.

Gold and Silver Mining Stocks: Leveraged Gains and Momentum Investing

Holmes highlights that gold and silver mining stocks are expected to provide leveraged returns, moving two to three times the daily price movements of the underlying metals. He notes that these stocks have started appearing in publications like Investor's Business Daily (IBD), which caters to momentum investors. These investors focus on revenue and cash flow momentum, year-over-year growth, and earnings per quarter.

He observes that many gold stocks have shown better growth than the overall stock market in revenue and cash flow, leading to their inclusion in IBD's top holdings. He advises investors to look beyond the largest producers and focus on mid-cap and small-cap companies that can demonstrate new mine development and significant growth potential. He specifically mentions royalty companies like Franco Nevada and Triple Flag as examples of companies that can benefit from events like the reopening of mines. He also points out that companies like Newmont, despite being a large producer, did not appear in IBD due to a lack of revenue momentum compared to peers.

Tether's Growing Influence in the Gold Market

A significant development discussed is the increasing role of Tether, the world's largest stablecoin issuer. Tether operates as a money market fund outside the US and EU, with over 500 million customers and approximately $200 billion in assets. It is a major buyer of US dollars and US government bonds.

Tether has begun a strategic pivot towards gold, driven by expectations of falling real interest rates. They have launched a gold stablecoin and are becoming one of the largest weekly buyers of gold globally. They have acquired significant gold reserves, including a safety deposit box in Switzerland, and have invested $150 million of their gold stablecoin into a mid-cap gold stock. Holmes describes Tether as a "game-changer" in alternative assets and highlights their profitability and significant bet on gold.

Bitcoin and Data Centers: An Undervalued Opportunity

While Bitcoin's price has been declining, Holmes believes Bitcoin data centers are deeply undervalued relative to traditional data centers. He points out that data centers trade at significantly higher multiples (10-15 times revenue per share, 20-25 times EBITDA) than gold stocks.

He identifies Bitcoin miners as the cheapest way to play this trend, as they leverage surplus or stranded electricity. Companies like Hive have built substations and transformers to convert existing infrastructure, allowing for a faster transition to higher-tier data centers compared to building from scratch. He believes that hyperscalers like Microsoft and Amazon will partner with or acquire these Bitcoin data centers, leading to a "mean reversion" in this technology overlay.

Copper: A Strategic Mineral for the Future

Copper is identified as a strategic mineral with significant upside potential. Its demand is driven by:

• Military Spending: Increased defense budgets require substantial amounts of copper.
• Autonomous Vehicles: These vehicles use significantly more copper than traditional cars.
• Data Centers: Copper is essential for wiring in data centers, which are crucial for AI and high-performance computing.
• Renewable Energy Infrastructure: Copper is a key component in the wiring for renewable energy systems.

Holmes expresses concern about China's potential to use its control over strategic minerals, including copper, as a geopolitical weapon. He notes that while China's "One Belt One Road" initiative has provided access to mineral deposits, it also represents a potential risk. He anticipates policy changes in Canada and the US to fast-track copper projects due to these concerns.

The Shifting Value of the Periodic Table and Resource Bull Market

Holmes emphasizes a fundamental shift in the value of elements on the periodic table, driven by government spending moving from social welfare to security. This security spending encompasses data centers, autonomous systems, and AI for defense. He highlights the critical need for copper, tungsten, and titanium in these sectors.

He firmly believes that the world is in a secular bull market for resources, characterized by significant underinvestment. He points to the low percentage of ETFs allocated to gold and precious metals (less than 2%) compared to the allocations of sophisticated investors (10-15%). This suggests a significant potential for capital inflow and "mean reversion" as more investors recognize the value in commodities and resource stocks.

Opportunities in Junior Mining and Regulatory Reform

Holmes believes that small-cap and mid-cap resource companies will see increased investor interest. However, he stresses the need for regulatory reform in Canada to streamline the process of exploration and mine development. He suggests using AI to simplify environmental regulations and improve price discovery for junior mining stocks, which is crucial for raising capital. He is optimistic that under Prime Minister Carney in Canada, there will be a shift towards infrastructure development, including data centers and AI, which will benefit the exploration and development sector.

Latin America's Emerging Role

The conversation also touches upon the positive developments in Latin America, with the rise of conservative political leaders in countries like Bolivia, Argentina, and Paraguay. These countries are experiencing GDP growth with low debt, indicating a favorable environment for investment. Paraguay, in particular, is highlighted for its conservative financial approach and 5% GDP growth.

Conclusion: A Bullish Outlook for Resources

The overall sentiment is strongly bullish on resources. Holmes concludes that the current reluctance of investors to fully embrace this sector, coupled with the fundamental drivers of MMT, geopolitical shifts, technological advancements, and resource scarcity, creates a compelling opportunity. He advises investors to recognize this secular bull market and position themselves accordingly, particularly in undervalued resource stocks and commodities.