The gold market continues to frustrate investors, having experienced its second single-day decline of up to 4% since the US and Israel initiated a war with Iran. This event is creating significant economic uncertainty and driving up energy prices and inflation levels. Spot gold is currently trading near $4,680 per ounce. Although prices may continue to fall in the short term, one fund manager states that these pullbacks and short-term fluctuations are precisely when investors can achieve real profits, as soaring government debt and limited central bank action will continue to support higher gold prices over the long term.

Tavi Costa, Founder and CEO of Azuria Capital, expressed his view that the current price correction in gold is merely noise. He believes the precious metals market is still in the early stages of a major bull market, increasingly driven by structural forces that are reshaping the mining industry and the global economy itself. Despite gold facing pressure from tightening liquidity and shifting interest rate expectations, Costa asserts that the macroeconomic backdrop remains firmly supportive. He stated, "This cannot possibly be the end of the cycle." He identifies the key driver for gold's long-term trajectory not as short-term market sentiment, but as the unsustainable nature of global debt. Governments, particularly the US government, are facing rising interest costs that are squeezing spending in other areas. Consequently, he expects policymakers to prioritize lowering interest rates to ease the debt repayment burden, regardless of inflation data or traditional economic signals. He believes this shift will become a powerful catalyst for gold. Costa made these remarks as US government debt has now surpassed $39 trillion. Due to the costs associated with the war against Iran, there is growing anticipation that US debt could reach $40 trillion before the autumn. This macroeconomic framework was also a central theme of Costa's speech at the 2026 Prospectors & Developers Association of Canada (PDAC) convention, where he outlined what he sees as a historic inflection point for hard assets. Even with gold's strong performance last year, Costa maintains that the sector remains under-owned and undervalued relative to the scale of the potential opportunity. He pointed out that US gold reserves now account for only about 3% of federal debt, compared to approximately 51% in the 1940s. He noted that this imbalance highlights the substantial room for gold prices to rise if governments move to rebuild their gold reserves or restore confidence in their balance sheets. Simultaneously, he observes a major structural shift occurring in global reserve management. Many nations, especially emerging markets, are gradually reducing their holdings of US Treasury bonds and increasing their gold reserves. This trend, combined with the potential for a long-term weakening of the US dollar, further reinforces his optimistic outlook for precious metals. He said, "In such situations, many people tend to be short-sighted and think the thesis has changed, but it is precisely these times when wealth can be accumulated. During market downturns, you should increase your holdings, not decrease them. It is during these times that the steadfast buy, not sell, and I am one of the steadfast." Furthermore, Costa believes the outlook for mining stocks is also highly promising. He stated the industry is in the "initial phase of a significant cycle," with capital inflows expected to accelerate. He indicated that one of the most striking aspects of the current market landscape is the disconnect between metal prices and the valuations of mining companies. Despite significant increases in gold and silver prices, the price-to-earnings ratios of many producers remain relatively low. In some cases, companies boast profit margins comparable to tech firms, while their production costs are substantially below current metal prices. Costa attributes this valuation gap to investor skepticism about the sustainability of higher precious metal prices, but he argues this skepticism is misplaced. He explained that supply constraints across the mining industry are becoming increasingly severe and are unlikely to be resolved soon. At the PDAC convention, Costa emphasized that data shows almost no major discoveries have been made in the industry over the past two years, an unprecedented situation in modern mining history. A shortage of new deposits has emerged following years of underinvestment in exploration and development. Capital expenditure across the commodities sector has been significantly constrained since the last cycle, limiting the pipeline for future supply. Therefore, Costa believes the industry is facing a scenario of prolonged supply tightness and structurally higher prices.