Pierre Lassonde, a legendary figure in the mining industry, stated that the global financial system is undergoing a structural transformation, with gold gradually set to replace the US dollar as the "ultimate reserve currency" and potentially climb to $17,250 per ounce.
As the co-founder of Franco-Nevada and former president of Newmont Mining, Lassonde noted in an interview with Kitco News that the current macroeconomic landscape strongly resembles the stagflation period of the 1970s. However, with global leverage at extremely high levels today, this cycle is expected to be more volatile.
"When Reagan was first elected in 1981, total US debt was just $1 trillion. Today, the annual interest expense alone reaches that amount, with total debt approaching $40 trillion," Lassonde said.
Latest data from early May 2026 shows US national debt nearing $39 trillion. High borrowing costs are further increasing the debt burden, with the Congressional Budget Office projecting net interest expenses to account for nearly 14% of total federal spending this fiscal year.
Against the backdrop of a US budget deficit expected to exceed 7.9% of GDP, Lassonde believes the Federal Reserve is effectively monetizing debt and printing money to cover deficits, providing long-term support for gold prices.
He stated unequivocally, "I reiterate, the $17,250 per ounce gold price target is well-founded, and I am confident we will see this price within the next three years."
**Gold Transforms into Ultimate Reserve Currency as De-Dollarization Accelerates**
"Gold is a commodity 90% of the time and the ultimate reserve currency 10% of the time," Lassonde explained. "When the US dollar can no longer fulfill the role of the ultimate reserve currency, gold takes its place. That is precisely what is happening now."
Central banks have become the dominant force in the gold market, continuously reducing dollar assets and increasing the proportion of gold reserves from less than 10% to over 20%. Data confirms the central bank gold-buying trend. As of the end of April 2026, the People's Bank of China's official gold reserves reached 74.64 million ounces, marking the 18th consecutive month of increases. Despite ongoing purchases, gold still accounts for less than 10% of China's foreign exchange reserves, indicating significant room for further accumulation.
Lassonde also mentioned that gold pricing power is shifting towards the Shanghai Gold Exchange, with robust retail demand and high volatility characteristics beginning to dominate physical gold pricing.
**Mining Stocks Severely Undervalued, Profit Margins Poised to Expand Fivefold**
Despite gold and silver prices already hitting record highs, Lassonde believes the mining sector remains significantly undervalued, with the market not yet fully pricing in the industry's unprecedented operational leverage.
"The all-in cost for most gold mining companies is between $1,500 and $1,600 per ounce." With the industry's average all-in sustaining cost around $1,450 per ounce, there remains extremely high profit potential relative to the current gold price.
"At a gold price of $4,600, companies could make a profit of $3,000 per ounce. If the price rises to $17,000, profit margins would expand fivefold, and these benefits are not at all reflected in stock prices. Even if gold only reaches $7,000, the industry's operating profit would double," Lassonde analyzed.
He praised the current extreme capital discipline of mining CEOs, who are no longer blindly expanding or engaging in high-priced acquisitions—a major weakness of the gold sector in the past. Companies are now focused on organic growth, dividends, and share buybacks. With 50 years in the industry, Lassonde noted this is the first time he has witnessed large-scale share buybacks across the gold sector.
Lassonde concluded that the current gold market is not merely a short-term price increase but a full-fledged mining cycle: "Many people are still watching the gold market from the sidelines. I ask, what are they waiting for?"