MW Why this veteran investor sees gold hitting $7,000 by the end of Trump's term

By Myra P. Saefong

Gold futures scored their 39th record-high settlement of the year on Tuesday.

For many traders, the resilience of gold's rally can easily be explained by strength in demand from global central banks and gold exchange-traded funds.

But to one veteran investor, it's record debt levels that really matter.

U.S. government debt stands at a "jaw-dropping $37.5 trillion, equal to roughly 124% of GDP," said Frank Holmes, chief executive officer and chief investment officer at U.S. Global Investors Inc. $(GROW)$ When President Richard Nixon cancelled the international convertibility of the U.S. dollar to gold in 1971, he noted, U.S. debt was around $400 billion, or less than 40% of GDP.

So in just over five decades, the U.S. has gone from a system of "fiscal restraint to a free-for-all," Holmes, who's also executive chairman of bitcoin miner Hive Digital Technologies Ltd. $(HIVE)$, wrote in a recent blog post.

Globally, government debt has "ballooned" to $324 trillion, or more than 253% of world GDP, he said, citing data from the Institute of International Finance.

U.S. margin debt - or money investors borrow from their brokers to purchase assets - has climbed by nearly 33% from a year ago to a record $1.06 trillion, said Holmes.

While governments are "overleveraged," U.S. households are also sitting on record debt, now at $18.39 trillion, he noted.

"Investors are trading on an inadvisable amount of margin to keep the party going," Holmes wrote. "As I see it, you want to be holding gold."

'Investors are trading on an inadvisable amount of margin to keep the party going. As I see it, you want to be holding gold.'Frank Holmes, U.S. Global Investors

On Tuesday, gold for December delivery (GC00) (GCZ25) settled at a record high of $3,873.20 an ounce on Comex. Prices based on front-month futures have seen nearly 47% rise year to date, and on Tuesday scored their second-best performance through the end of September on record, according to Dow Jones Market Data.

But the metal's rally may still have years to go. Holmes sees gold climbing to $7,000 an ounce, potentially, by the end of President Donald Trump's second term as president, which ends in January 2029. Back in 2020, he had called for $4,000 gold in three years, citing global economic stimulus and money printing.

Now, the "debt pile is unfathomably massive, and it's accelerating," he wrote. "Fiscal imbalances are widening, and monetary policy is being constrained. The Fed can't raise rates aggressively without bankrupting the government, but it also can't make deep cuts without tanking the dollar.

"Both options support higher gold prices, in my opinion," Holmes added.

Meanwhile, central banks continue to buy record amounts of physical bullion, and net inflows of North American gold-backed ETFs are having their second-strongest year on record, he said, citing data from the World Gold Council.

"Central banks continue to trip over themselves to add bullion to their reserves," said Holmes. "Bank governors understand that fiat can be printed at will, but real money - gold - is finite."

Read: Gold hit another record high. Has it formed a bubble yet?

Retail demand in countries like India and China also remains "robust, driven by the 'love trade,'" which refers to the two countries' cultural affinity for the precious metal for gift giving and as a symbol of status, he noted.

"I called for $4,000 gold, and we're nearly there," Holmes said. "Looking ahead, I know see $7,000 on the horizon.

He admitted that the call may sound bold, but added that in "today's high-debt environment," the gold call might also be the "prudent one."

-Myra P. Saefong

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September 30, 2025 14:25 ET (18:25 GMT)

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