Gold Near $4,500, Silver Above $80: What Comes Next in 2026 | Greg Orrell

Key Concepts

• Precious Metals Bull Market: Significant price increases in gold, silver, and copper, particularly in late 2025 and early 2026.
• OCM Gold Fund: A specialized boutique investment manager focused on gold investments, managed by Greg Orel since 1996.
• All-In Sustaining Cost (AISC): A comprehensive cost metric used in gold mining, reflecting the total expense of producing an ounce of gold.
• Tether & Gold: The increasing involvement of Tether, a cryptocurrency stablecoin issuer, in purchasing gold, impacting market dynamics.
• Federal Debt & Gold Correlation: A strong historical correlation (93% since 1971) between the total US federal debt and the price of gold.
• Mine Life & Grade: The estimated duration of a mine’s production and the concentration of valuable minerals within the ore. “Low-grading” refers to lowering the cut-off grade to extend mine life, potentially at the expense of profitability.
• Reserves & Resources: Geological estimates of the amount of minerals present in a deposit (resources) and the economically viable portion (reserves).

The 2026 Metals Outlook: A Discussion with Greg Orel of OCM Gold Fund

Introduction & Market Overview

The discussion, hosted by Paul Harris of Kiko Mining, centers on the extraordinary performance of precious metals at the end of 2025 and the beginning of 2026. Gold is approaching $4,500/ounce, silver has surpassed $80/ounce, and copper is at $13,000/ton ($6/pound). The conversation aims to analyze the drivers behind these price surges and their implications for investors.

OCM Gold Fund & Greg Orel’s Background

Greg Orel, Portfolio Manager at OCM Gold Fund (Orel Capital Management), has managed the fund since 1996. His experience extends beyond fund management, including a background in brokerage, investment banking, and a family history in mining – his father brought the Royal Mountain King mine into production in the 1980s. This provides him with a long-term perspective and “a seat at the table” within the industry.

Exceptional 2025 Performance & The Vertical Ascent

2025 witnessed unprecedented gains: gold increased by 70%, while silver outperformed, rising by approximately 170%. Notably, gold experienced monthly price increases throughout the entire year – a phenomenon not observed since 1971. This sustained upward momentum, culminating in a “vertical” price chart in December, prompted the question of what triggered this acceleration.

Drivers of the Price Surge

Orel attributes the surge to a combination of factors. Demand from Eastern markets (China and Russia, particularly China) played a significant role. Crucially, the entry of Tether, a major cryptocurrency stablecoin issuer, into the gold market, purchasing two tons weekly on Mondays, disrupted the traditional dynamics. This limited the ability of central banks and bullion banks to suppress the gold price, as they anticipated producer selling. A shift in market sentiment, coupled with short covering in the silver market, further fueled the rally. The silver market, in particular, saw a dramatic readjustment after years of suppressed prices, driven by anticipated demand from industries like electric vehicle batteries (Samsung reportedly seeking 50 million ounces).

The “Boxing Day Massacre” & Subsequent Rebound

A sharp pullback on December 26th (“Boxing Day massacre”) was attributed to typical end-of-year trading activity – profit-taking and repositioning. Orel views this as a temporary blip, not indicative of a broader trend reversal, and the market quickly rebounded in early January.

First Quarter 2026 Outlook & Potential Pullbacks

Orel anticipates healthy bull market continuation, acknowledging that pullbacks are a natural part of a bull market cycle, providing opportunities for repositioning. He emphasizes the lack of Western participation in the gold market as a key factor, suggesting that increased Western investment could further accelerate price gains. He notes that a rollover in equities, which hasn’t yet occurred, would likely signal a significant bullish phase.

External Factors & Precious Metals

Several external factors are expected to influence the precious metals market in 2026. These include the response to the arrest of Venezuelan President Nicholas Maduro by the Trump administration and the potential for peace in Ukraine. However, the primary driver, according to Orel, is the US government’s ability to control its federal debt.

The US Debt & Gold Correlation

A 93% correlation has existed between the total US federal debt and the gold price since 1971 (when the gold window was closed). Orel believes that the weakening US financial position will continue to support gold prices. He suggests that Trump’s inclination towards easy monetary policy, rather than austerity, will further contribute to this trend.

Price Forecasts & Realistic Expectations

Analyst forecasts for the 2026 gold price range from just under $7,000/ounce to over $8,000/ounce. Orel believes these forecasts are plausible, noting that investment bank forecasts tend to be conservative and often project declining prices further into the future, a pattern that historically hasn’t held true. He remains bullish on gold, particularly if the US fails to control its spending.

Implications for Gold Producers

The high gold prices translate to significantly improved margins for gold producers, with all-in sustaining costs now often lower than the price increase seen in the past year. This presents both opportunities and challenges. Orel advises investors to focus on companies that avoid “low-grading” their mines (lowering cut-off grades to extend mine life) and prioritize maintaining reserve quality.

Capital Allocation Strategies for Miners

Orel advocates a straightforward capital allocation strategy for gold producers: repaying capital invested in mine development, ensuring shareholder participation through dividends or other returns, and maintaining sufficient capital for future mine projects. He emphasizes the importance of consistent messaging and delivery from management.

Leverage & Rotation in Gold Stocks

While many gold stocks experienced triple-digit gains in 2025, the leverage is now concentrated in lower-quality names. Orel anticipates a potential rotation of investment from higher-quality companies to these lower-quality names, but cautions investors to be mindful of the increased risk.

OCM’s Investment Strategy

OCM Gold Fund employs a diversified strategy, allocating 25% of its portfolio to large producers, 25% to intermediate producers, 25% to junior producers, and the remaining 25% to royalties, silver, and exploration/development companies.

M&A Activity & Future Consolidation

M&A activity in the gold mining sector is heating up. Barrick’s potential split into separate companies and the possibility of a Newmont-Barrick merger are discussed. Orel believes a Barrick split would maximize shareholder value and that Newmont is likely to pursue Nevada Gold Mines and Barrick’s PV project.

Hopes & Fears for 2026

Orel hopes to see significant discoveries from exploration spending and anticipates a strong performance from silver. He emphasizes the importance of selecting stocks carefully and avoiding “tin hat” promoters. His primary fear is a significant drop in gold prices, which could disrupt producer plans. Ultimately, he believes the biggest issue remains the US government’s ability to control its budget and avoid a future monetary system crisis.

Conclusion

The conversation paints a bullish picture for precious metals in 2026, driven by a combination of economic factors, geopolitical events, and changing market dynamics. Orel stresses the importance of a diversified investment approach, careful stock selection, and a focus on companies that prioritize shareholder value and responsible mine management. The long-term outlook hinges on the US government’s ability to address its debt challenges, which continues to be a strong historical driver of gold prices.