Gold’s pullback is a buying opportunity as debt risks continue to grow, says Tavi Costa

Gold has pulled back to $1,610.90/oz, its lowest since the January selloff from near $1,800, marking the second 4% single-day loss amid the escalating US-Israel-Iran conflict. Despite near-term downward pressure from tighter liquidity and shifting rate expectations, Azuria Capital CEO Tavi Costa sees this as a buying opportunity within a longer-term bull market driven by rising global debt and structural shifts in reserve management. Costa highlights that the unsustainable $39 trillion+ US government debt, expected to surpass $40 trillion this year due to war costs, will force policymakers to prioritize lowering interest rates. This, in turn, should provide a strong tailwind for gold prices. He points out the historical under-ownership of gold, with US gold reserves now only about 3% of federal debt versus around 51% in the 1940s, signaling significant upside potential as countries, especially emerging markets, shift reserves away from US Treasuries toward gold. Beyond bullion, Costa sees the gold mining sector in the early stages of a major cycle, noting a dislocation between metal prices and mining sector valuations. Many producers trade at modest multiples despite strong margins and low production costs, indicating potential upside from re-rating and capital inflows. This structural backdrop, coupled with geopolitical uncertainty and fiscal pressures, makes current pullbacks attractive entry points for investors with conviction in precious metals.