Mining industry veteran Pierre Lassonde said the global financial system is undergoing a structural shift that could push gold prices to $17,250 per ounce within the next three years as the US dollar gradually loses its role as the world’s primary reserve currency.
In an interview with Kitco News, the co-founder of Franco-Nevada and former president of Newmont Mining argued that today’s macroeconomic environment resembles the stagflation era of the 1970s, though with significantly higher levels of leverage and sovereign debt.
Rising debt and inflation strengthen gold outlook
Lassonde compared the current economic backdrop to the late 1970s, when gold prices surged as inflation and interest rates climbed simultaneously.
However, he emphasized that the scale of US debt today creates a much more fragile financial environment.
“The total debt in 1981, when Reagan was first elected, was $1 trillion,” Lassonde said. “Today, that’s the amount of money that the US has to pay in interest every year because the total debt is approaching now $40 trillion.”
US gross national debt currently stands near $39 trillion, while Congressional Budget Office projections show net interest expenses accounting for nearly 14% of federal spending this fiscal year.
Lassonde argued that persistent deficits and higher borrowing costs are forcing the Federal Reserve into effectively monetizing government debt.
“With the US budget deficit projected to exceed 7.9% of GDP,” he said the Fed is effectively “monetizing the debt and printing dollars.”
“I reiterate that my $17,250 gold price is as solid as can be,” Lassonde stated. “I’m convinced we will see this in the next… three years.”
Central banks accelerate move away from the dollar
According to Lassonde, one of the key drivers behind gold’s rally is a broader shift in the global reserve system as countries increasingly diversify away from the US dollar.
“Gold, 90% of the time is a commodity, but 10% of the time it’s the currency of last resort,” Lassonde explained. “When the dollar doesn’t perform its role as currency of last resort, guess what? Gold takes its place, and that’s what’s happening right now.”
He pointed to China’s efforts to build alternative payment infrastructure outside the US financial system, arguing that such systems are rapidly expanding.
Recent central bank data support continued gold accumulation.
The People’s Bank of China reported that its official gold reserves rose to 74.64 million troy ounces at the end of April 2026, marking the country’s 18th consecutive month of declared gold purchases.
Lassonde also said price discovery is increasingly shifting toward the Shanghai Gold Exchange as strong retail demand influences physical pricing.
Mining stocks seen as undervalued despite record margins
Lassonde argued that gold mining equities remain significantly undervalued despite historically strong operating margins created by rising bullion prices.
“Most of the miners today… have total cost-in of $1,500, $1,600,” Lassonde noted.
Industry data shows average all-in sustaining costs across the mining sector are now around $1,450 per ounce.
At current gold prices, miners are generating historically large margins.
“Well, on $4,600, that’s $3,000 an ounce margin,” Lassonde said. “Think, like gold goes to 17,000, the margins are going to expand by a factor of five. None of that is in the stock price. None of it.”
He praised mining companies for maintaining more disciplined capital allocation strategies, including dividends, buybacks, and internally funded growth rather than aggressive acquisitions.
“This is the first time ever that I’ve seen buybacks in the gold space,” Lassonde said.
Lassonde also criticized Canadian pension funds for allocating limited capital to domestic equities and mining companies, calling the situation an “indictment” of fund managers.
Looking ahead, he maintained that the current environment represents a full-scale mining cycle rather than a temporary price rally.
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