Peter Grandich: Gold's Rise Not Over, Plus Silver, Copper in 2026

Key Concepts

• Capital Preservation: Prioritizing the protection of existing capital over aggressive growth, particularly in anticipation of market downturns.
• Physical Gold & Gold Producers: A shift in investment strategy from physical gold (as a capital gains play) to gold mining companies due to their potential for higher percentage gains through free cash flow.
• Junior Resource Stocks: Small-cap companies involved in the exploration and development of mining projects, seen as having significant leverage to metal price increases.
• Macroeconomic Outlook: A pessimistic view of the global economic and political landscape, characterized by bubbles, political division, wealth inequality, and geopolitical risks.
• BRICS Nations: The economic alliance of Brazil, Russia, India, China, and South Africa, viewed as a potential shift away from US dollar dominance.
• Free Cash Flow: The cash a company generates after accounting for capital expenditures, a key metric for evaluating gold mining companies.
• K-Economy: A socioeconomic divide where the top 10% of earners live a vastly different lifestyle and are insulated from economic hardships faced by the majority.

The 2025 Wrap-Up & 2026 Outlook: A Conversation with Peter Grandich

Introduction & Recent Performance

Charlotte Mloud of investingnews.com interviews Peter Grandich of Peter Grandich and Company, discussing his exceptional investment performance in 2025. Grandich attributes this success to a contrarian bet made in 2021: a conviction that gold would outperform both the US stock market and bonds for at least three years (later extended to four). This decision involved selling all general equities (except one) and bonds, and investing entirely in physical gold. As of the interview, gold has risen 36%, matching the Dow’s performance, while bonds have lost value. He subsequently shifted his focus to major gold producers, anticipating greater percentage gains from their free cash flow, and then further down the chain to junior resource stocks. Currently, his personal portfolio is largely in cash, money market T-bills, and CDs, reflecting a cautious outlook.

Dire Outlook for 2026-2027

Grandich expresses a significantly pessimistic outlook for the next few years, stating that the current challenges surpass those faced during the previous three major downturns. He describes the current economic environment as “the bubble of all bubbles,” citing inflated valuations in AI and cryptocurrency as examples. He believes these bubbles are unsustainable, fueled by speculative fervor and lacking fundamental support.

Key Concerns & Contributing Factors:

• Political Polarization (US): Grandich highlights extreme political division in the US, suggesting an inability to cooperate effectively during a crisis. He believes both parties are entrenched in blame and finger-pointing.
• Wealth Inequality (K-Economy): He points to the concentration of wealth in the top 10% of Americans (owning approximately 86% of assets), while the bottom 50% owns little to none. This disparity fuels social unrest and resentment, creating a breeding ground for populist and potentially destabilizing ideologies.
• Geopolitical Risks & Trade Wars: Grandich criticizes the Trump administration’s trade war strategy, characterizing it as unnecessarily aggressive. He notes the deterioration of US-Canada relations as a consequence, citing a loss of trust and commonality. He points to the lack of significant trade deals despite promises of “90 deals in 90 days” and the failure to “break the kneecaps” of BRICS nations. He observes that China has actually benefited from the trade tensions.
• Central Bank Gold Purchases: A critical factor in his bullish gold outlook is the significant and increasing gold purchases by central banks, who are seeking a “hardness” or hard asset as a potential alternative to fiat currencies in the event of a debt implosion. He notes the testing of a “unit” where gold comprises 40% of the currency mix.

Capital Preservation Strategy

Grandich advocates for a capital preservation strategy, emphasizing minimizing losses rather than maximizing gains. He suggests allocating a percentage of one’s portfolio to liquid, low-risk assets (money markets, CDs, T-bills) equal to their age. He believes this approach is particularly crucial for older investors with limited time to recover from potential losses. He notes that seniors currently hold a higher percentage of their portfolios in equities than they did 20 years ago, at a time when equities are arguably overvalued.

Gold & Precious Metals: A Shifting Perspective

While initially focused on physical gold as a capital gains opportunity, Grandich has shifted his focus to gold mining companies, believing their free cash flow offers greater potential for percentage gains. He further moved down the chain to junior resource stocks, seeing them as undervalued and possessing the most leverage to rising metal prices.

He clarifies he is not a “mega bull” on gold, cautioning against unrealistic price targets (e.g., $10,000 or $20,000 per ounce). He emphasizes that a stable gold price, even at current levels, would still be beneficial, especially if other asset classes underperform. He believes the key driver for gold is the loss of US economic and military dominance and the rise of China, coupled with central bank demand. He notes that major financial service firms are now incorporating gold into portfolios, a significant shift from their historical aversion.

Silver’s Potential

Grandich acknowledges his past skepticism towards silver, likening it to “kissing your sister.” However, he has become more bullish on silver due to improved fundamentals, particularly the shift in physical market control from London and New York to Asia. He believes this reduces the potential for manipulation and supports higher prices. He anticipates a consolidation period for both gold and silver after their recent gains.

Copper Outlook

Grandich remains bullish on copper, citing a tightening supply-demand balance and increasing difficulties for major producers in maintaining production levels. He highlights the growing political and social risks associated with mining in certain regions, limiting the availability of new supply. He believes that if oil prices were to fall to around $50 per barrel, it could present a compelling investment opportunity, but currently, most sectors appear fully priced.

Investment Advice for 2026

Grandich’s primary advice for investors in 2026 is to prioritize capital preservation. He suggests aiming for a modest double-digit return (10-20%) on gold and silver, rather than chasing higher gains in riskier assets. He believes the ability to avoid losses will be the key differentiator between successful and unsuccessful investors. He concludes with the analogy of being a “live chicken versus a dead duck,” advocating for a cautious and defensive approach.

Notable Quotes:

• “I sold all general equities but one and no bonds and bought physical gold on the belief…it could go up more than both stocks and bonds.” – Peter Grandich
• “I think the issues facing us now, if you added all the three of them previous ones are not as bad as what we have going forward.” – Peter Grandich
• “We are in the bubble of all bubbles.” – Peter Grandich
• “Error on the side of caution and listen, this is what I hear from a lot of even longtime clients. Pete, I know you're right, but I'm praying you're wrong.” – Peter Grandich
• “Be a live chicken versus a dead duck.” – Peter Grandich (a metaphor for prioritizing capital preservation)

Technical Terms:

• Free Cash Flow: Cash flow available to the company after all expenses and capital expenditures are paid.
• BRICS: An economic alliance of Brazil, Russia, India, China, and South Africa.
• K-Economy: A socioeconomic divide characterized by extreme wealth inequality.
• Triple Witching: A quarterly event in the US stock market where options and futures contracts expire simultaneously, often leading to increased volatility.
• Unit: A proposed monetary system incorporating gold alongside other currencies.
• M&A: Mergers and Acquisitions – the consolidation of companies.

Logical Connections:

The conversation flows logically from a review of past performance to a detailed assessment of the current economic and political landscape. Grandich builds a case for a cautious investment strategy based on his analysis of these factors. The discussion then moves to specific asset classes (gold, silver, copper) and how they fit into his capital preservation framework. The final section provides actionable advice for investors based on his overall outlook.

Data & Statistics:

• Gold Performance: Up 36% (matching the Dow)
• Bond Performance: Lost value over the same period.
• Wealth Distribution: Top 10% of Americans own approximately 86% of all assets; the bottom 50% own little to none.
• Senior Equity Holdings: Seniors currently hold twice as much equity as a percentage of their portfolios compared to 20 years ago.
• Life Expectancy: One in four married couples aged 65 will have at least one partner live to 100.

Conclusion:

Peter Grandich presents a compelling, albeit pessimistic, outlook for the coming years. He advocates for a defensive investment strategy focused on capital preservation, favoring gold mining companies and junior resource stocks as potential sources of relative strength. His analysis highlights the importance of understanding macroeconomic trends, geopolitical risks, and the changing dynamics of the global financial system. His core message is that in a challenging environment, avoiding losses is paramount.