Why Gold, Silver, and Copper Are Entering a New Phase in 2026 | David Erfle

Key Concepts

• Geopolitical Risk: Increased global instability (Venezuela, Mexico, Greenland, Ukraine) driving metal prices.
• Monetary Policy: Anticipated easing of US Federal Reserve policy and its impact on precious metals.
• National Resource Competition: Growing competition between nations for control of critical minerals (rare earths, lithium, copper, oil).
• Trump Administration Policies: The potential impact of President Trump’s policies on geopolitical stability, trade, and the Federal Reserve.
• Metals Price Surge: Significant increases in gold, silver, and copper prices at the start of 2026.
• M&A Activity: Consolidation within the mining sector, particularly in copper and silver.
• Junior Miner Potential: Opportunities within junior mining companies, especially those de-risking projects.
• US Supply Chain Security: US government initiatives to secure domestic supply chains for critical metals.

Metals Price Surge and Geopolitical Drivers

The year 2026 began with a significant surge in metals prices. Gold approached $4,500 per ounce, silver exceeded $80 per ounce, and copper reached $13,000 per ton (approximately $6 per pound) before a slight pullback. This rally followed all-time highs in 2025, marking the first time gold, silver, and copper prices hit record levels simultaneously since 1979.

A primary catalyst for this increase was heightened geopolitical risk. The Trump administration’s actions, including intervention in Venezuela (described as a “Don Row Doctrine” – a neoism referencing the Monroe Doctrine), rhetoric regarding Mexico, and consideration of acquiring Greenland, significantly increased global uncertainty. China’s reaction to the Venezuela situation, demanding the restoration of its sovereignty, further fueled tensions. The potential for a peace deal in Ukraine was noted as a counterbalancing factor, but was largely overshadowed by these other developments.

David Erley emphasized that these factors, driving prices higher in 2025, remained in play at the start of 2026, creating a “sector-friendly hurricane.”

Monetary Policy and Precious Metals

The anticipated easing of monetary policy by the US Federal Reserve is expected to further boost precious metals prices. With President Trump likely to appoint a Fed chair aligned with his preferences, a reduction in interest rates is anticipated. Lower interest rates reduce the opportunity cost of holding non-yielding assets like gold and silver, making them more attractive. The US government’s substantial deficits (running $2 trillion annually, adding $1 trillion to the nearly $39 trillion national debt every 80 days) and the potential for sovereign debt defaults also contribute to the bullish outlook for precious metals. Erley believes the Fed easing policy, potentially exceeding what economic conditions justify, is a significant “underappreciated tail risk” that could reignite inflation.

National Resource Competition and US Policy

The transcript highlights a growing trend of national competition for resources, particularly in rare earths, lithium, tungsten, and copper. The US is actively seeking to secure its access to these critical materials. The intervention in Venezuela is partly motivated by a desire to control Venezuelan oil, previously shipped to China.

A key development is the US Department of Defense’s 40% stake in a joint venture with Korea Zinc to build a metal smelter in Tennessee. This, facilitated by JP Morgan Chase’s $1.5 trillion commitment to securing US supply chains, signals a shift towards domestic metal processing and reduced reliance on foreign sources. This move is seen as a response to China’s dominance in the refining of critical metals.

Mining Company Transactions and Developments

Several specific mining company transactions were discussed:

• Highlander Silver & Bear Creek Mining: Highlander Silver acquired Bear Creek Mining and its Karani silver project in Peru for a deal valued between $130-140 million Canadian. Karani boasts reserves of 230 million ounces of silver and a projected annual production of 9.6 million ounces. Erley views this as a bargain for Highlander, paying 61 cents per ounce of reserves and 35 cents per ounce of resources.
• G2 Goldfields & OKO Project (Guyana): G2 Goldfields released a positive feasibility study for its OKO gold project, projecting 228,000 ounces of annual production for 14 years at an all-in sustaining cost of $1,200 per ounce. The project requires $664 million in capital investment. Erley anticipates a takeover by G Mining Ventures, given the project’s proximity to G Mining’s O West mine.
• Integrity Resources & Delmare Project (Idaho): Integrity Resources’ feasibility study for the Delmare gold and silver project forecasts 106,000 ounces of annual production for 10 years at an all-in sustaining cost of $1,500 per ounce, requiring $390 million in initial capital. Erley is bullish on Integrity, noting its strong performance and potential for growth.
• Forest Skeu & Ala Copper (Peru): Australia’s Forest Skeu is acquiring Ala Copper for $1.39 million Canadian, consolidating ownership of the Kenya Ryako copper project.
• China Molybdenum (CMOC) & Equinox Gold (Brazil): CMOC is acquiring Equinox Gold’s Brazilian mines for $1 billion US, providing Equinox with capital to reduce debt and invest in other projects.

Copper Market Dynamics

The copper market is experiencing a surge in demand and M&A activity. The price exceeding $6 per pound has revived interest in previously uneconomic projects. China is actively acquiring copper assets in Latin America, exemplified by the CMOC-Equinox Gold deal. The US intervention in Venezuela, aiming to secure access to Venezuelan oil, also has implications for copper, as Venezuela possesses significant copper resources.

Junior Miner Opportunities

Erley emphasized the potential for significant gains in junior mining companies, particularly those de-risking projects and benefiting from the rising metal prices. He highlighted his successful investment in a junior copper company that tripled in value since July. He also pointed to Montage Gold, where JMJ subscribers have seen a 15x return.

Market Sentiment and Future Outlook

The transcript suggests a strong bullish sentiment towards precious metals and base metals. Analysts’ gold price forecasts range from $7,000 to over $8,000 per ounce. Erley believes that if gold maintains the $4,300 level, it could reach $5,000-$5,500 in Q1, followed by a 15-20% correction.

He anticipates continued chaos and volatility in the geopolitical landscape, which will likely support higher metal prices. The market is currently “underowned” by generalist fund managers, presenting an opportunity for increased investment as they recognize the sector’s potential.

Notable Quotes

• David Erley: “Chaos is always good for gold and silver prices.”
• David Erley: “It appears that this storm is going to morph into a sector-friendly hurricane as we begin the new year.”
• Paul Harris: “The gold price averaged…more than $4,000 US per ounce in the fourth quarter.”

Conclusion

The start of 2026 is marked by a significant surge in metals prices driven by a confluence of factors: heightened geopolitical risk, anticipated easing of monetary policy, and growing competition for critical resources. The mining sector is experiencing increased M&A activity, and junior miners present attractive investment opportunities. The US is taking steps to secure its domestic supply chains, while China continues to expand its control over global resources. The outlook for precious metals and base metals remains bullish, with potential for further gains amidst ongoing volatility and uncertainty. The year promises to be “interesting” and potentially highly profitable for investors in the mining space.