Peter Akerley, CEO of Erdene Resource Development, argues that the recent pullback in gold from roughly $4,700 to around $4,000 is a temporary setback driven by higher rates tied to inflation and oil, plus liquidity pressures from the tech selloff.
In an interview on Commodity Culture, he maintains that the long term case remains fully intact because of the structural $40 trillion U.S. debt burden and accelerating central bank buying.
“You can’t believe that it’s anywhere but downwards as we get past this short term phenomenon,” Akerley says of interest rates, noting that rates must eventually decline to manage the debt load.
He points to third quarter central bank purchases of more than 10 million ounces, the strongest pace since late 2024 and the equivalent of roughly four times the annual output of the world’s largest gold mine. “A whole raft of countries are moving away from the U.S. dollar and looking to strengthen their currency through the increased purchase of gold,” he adds, linking the trend directly to declining faith in the dollar amid rising U.S. debt and rates.
Akerley sees the physical supply picture remaining structurally tight. Grades across the industry have fallen over time, and discovering large new deposits capable of replacing production at majors has become extremely difficult. “It is very difficult to go find a half a million to million ounce annual production line anywhere in the world,” he observes, adding that operators must increasingly look to underexplored but prospective belts for high grade material.
Against that backdrop he describes a $4,000 gold price as still delivering “a very good return for most gold miners,” even as companies exercise greater caution on major capital commitments and acquisitions amid cost and timeline uncertainty.
For Erdene, the setup centers on its high grade, low cost Bayan Khundii gold mine in southwestern Mongolia, now in commercial production and generating roughly 12,000 ounces per month with all in sustaining costs near $1,830 an ounce. Akerley founded the company after recognizing Mongolia’s potential 30 years ago. “I saw the opportunity to explore one of the world’s truly great gold copper belts that hadn’t seen modern exploration,” he recalls, leading to the discovery of the Khundii Minerals District that now hosts multiple deposits. Cash flow from the operating mine is intended to fund further development across the district rather than relying on equity markets.
He highlights Mongolia’s improving advantages as a mining jurisdiction: a functioning parliamentary democracy where mining underpins the economy, rapidly advancing infrastructure including roads, rail, and grid power, a young educated workforce, and proximity to China as the largest metals consumer. Recent changes to the mineral law, including a sharp reduction in the copper royalty, further support investor interest. Erdene also advanced its nearby Zuun Mod molybdenum copper project with a preliminary economic assessment showing robust economics at current prices, with discussions underway with potential partners.
Akerley concludes that the combination of constrained new supply, relentless central bank accumulation, and the inevitable pressure on U.S. rates from the debt burden sets the stage for higher gold prices once short term headwinds clear. For a company already producing high grade ounces at low costs in a jurisdiction that has quietly transformed, the current environment offers a clear path to self funded growth.
