Why billionaire investor Thomas Kaplan isn't stressing about gold and silver's historic sell-off

• Billionaire Thomas Kaplan shrugged off the slump in gold and silver prices as short-term volatility.
• Kaplan said his long-term price target for gold is in the "tens of thousands of dollars."
• Kaplan said that gold will keep rising because it's a "currency that can't be debased at will."

Billionaire investor Thomas Kaplan says he's unfazed by the historic plunge in gold and silver prices — and expects the precious metals will rally to even greater highs.

There's "every reason in the world to buy gold, and silver is just gold on steroids, up and down," Kaplan told Business Insider on Friday afternoon.

Gold and silver soared to record highs last week before falling by around 10% and more than 30%, respectively, on Friday after President Donald Trump nominated Kevin Warsh as the Federal Reserve's next chairman.

The news triggered profit taking and bets on a stronger dollar, fueling volatile trading in gold and silver on Monday morning.

Kaplan is the chairman of NovaGold Resources, a gold exploration-and-development company, and founder and chief investment officer of The Electrum Group, an investment firm focused on natural resources.

He told Business Insider that people thought he was "loopy" in 2007 for saying a fair price for gold would be $3,000 to $5,000 an ounce.

The yellow metal soared from below $700 at the start of that year to over $5,600 at its peak last week, while silver jumped from under $15 to over $120 in the same timeframe. They were trading around $4,800 and $84, respectively, on Monday morning.

"The only things that I've believed in since the financial crisis are gold and silver, and that's how I've positioned myself," Kaplan said, adding that he knew it could take a decade or longer for his thesis to fully play out.

'Metaphysical certitude'

Kaplan said his long-term outlook for gold is in the "tens of thousands of dollars," and he expects its price to follow a similar trajectory to the Dow Jones Industrial Average, which has skyrocketed roughly 30-fold over the past 40 years.

"I do believe that we're witnessing the chickens coming home to roost," he said, adding that the reasons to own gold and silver are "10 times what they were in 2007."

Kaplan touted the Donlin Gold project in Alaska, in which NovaGold holds a 60% stake. Paulson Advisors, veteran investor John Paulson's firm, paid $800 million to acquire the other 40% last summer.

He called it the "fattest pitch I've ever seen," referring to Warren Buffett's advice to treat investing like baseball and wait for the perfect pitch to swing.

"I have metaphysical certitude that building the biggest gold mine in the United States, in a great place like Alaska, is going to be one of the biggest wins of my generation — certainly in precious metals anyway," he said.

Kaplan said gold's true value isn't as a hedge against inflation, a weaker dollar, or geopolitical turmoil. The fundamental driver of its rising price is that it's a "currency that can't be debased at will," he said, meaning that central banks can't simply print more of it and dilute the value of existing gold.

He said that crypto promoters have done a "great service" to gold investors by pitching digital tokens as "gold 2.0." They've inadvertently strengthened the case that gold itself is "pretty damn good," he explained.

Outside investing, Kaplan heads-up Panthera, a nonprofit devoted to "big cat" conservation, and owns the world's largest private collection of Rembrandts.

Kaplan is set to auction the first Rembrandt he acquired, "Young Lion Resting," at Sotheby's New York on Wednesday, and has pledged that the expected $20 million or so in proceeds will go to supporting Panthera's work.