NEW YORK (Kitco News) - Next year's outlook for mining stocks is simply grim, this according to Frank Holmes, CEO of U.S. Global Investors, a firm specialized in global investments.

In this special Outlook edition of the Kitco Gold Report, Holmes discussed his outlook for gold and the mining sector. The usually optimistic Holmes said he thinks this might be the worst year for mining stocks.

'I think that we are going to see the worst write-offs -- that will all happen in the first quarter of 2016 and that will be an inflection point for the gold stocks, ' he said.

When asked what would be the single most important factor investors should be eyeing next year, he bluntly said, 'geopolitics.'

'Russia having a battle with Turkey,' he said. 'Erdogan is a trouble maker so that's a big risk,' he added.

Reflecting on the past year, Holmes said that despite the 'down days,' gold has held up well as a currency. February comex gold futures were last quoted down $12.80 at $1,062.90 an ounce.

Holmes also noted that he was also impressed by the gold and silver 'physical off take' consumption that took place in North America when prices dipped to multi-year lows. 'People have been buying gold and silver on sale,' he said.

'Looking to next year, I think the big opportunity will be sentiment and improving gold consumption in China,' he said. 'I think it will continue to grow as they try to build up their foreign reserves.'

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.