Oh, wow. That's odd!
The error message is a pretty straightforward "you don't have a package installed that is needed," which is generally remedied with a one-time install.packages() call. What's weird, though, is that I don't see exactly why that would be needed.
There is a fig.showtext chunk option (described in Yihui's documentation on chunk options), and that does rely on the showtext package. What's odd is that you're not using that option!
One option would be to install the showtext package and confirm that it installs and is able to be loaded (it's a "suggests" package for knitr). It may be that it's not getting loaded on your machine and, if it was there, the issue would go away.
Another thing to try would be to remove fig.show='hold' from the chunk options and see if the issue goes away then. That would at least hone in on that option being the issue (but I'm not clear on how fig.show and fig.showtext might be related). It could also be related to the include_graphics() function, which is a knitr function. But, again, if showtext was required to use the function, then it shouldn't be just a "suggests" package for knitr.