Gold prices are approaching record levels amid a wave of safe-haven buying triggered by escalating tensions between Iran and Israel. On June 14, spot gold traded around $3,433 per ounce, according to Investing.com, edging closer to its all-time high. Silver followed suit, holding above $36.30 per ounce.
While the military flare-up initially captured headlines, experts say the deeper force behind gold’s rise lies elsewhere.
Debt Crisis Seen as the “Real Bomb”
“Gold doesn’t need a war to go higher. The real bomb is the global debt problem,” said Jeffrey Gundlach, CEO of DoubleLine Capital, in comments to Business Insider. Gundlach predicts gold could hit $4,000 per ounce, citing soaring U.S. deficits and waning trust in Treasury markets.
The Institute of International Finance estimates global debt has hit $325 trillion, or 328% of global GDP-a record high. This structural issue, analysts warn, is quietly undermining confidence in fiat currencies worldwide.
In a tweet that gained traction among investors and analysts, Azerbaijani economist Rashad Hajiyev wrote, “Gold does not need military tensions to go higher. The global debt problem is a much bigger bomb, so gold is destined to go higher.”
His comments echoed growing sentiment among market observers that the real fuel behind gold’s climb is structural-not situational.
Central Banks Continue to Load Up on Gold
James Steel, chief precious metals analyst at HSBC, told the Financial Times that central banks have been accelerating gold purchases, particularly in countries like China, Turkey, and India. “This is part of a longer-term shift in portfolio strategy,” he said, highlighting growing concerns over currency and credit risk.
Debt Burden Replaces Inflation as Key Risk
Ray Dalio, founder of Bridgewater Associates, warned last month that the U.S. could face a “debt-induced economic heart attack” if fiscal trends persist. U.S. interest payments recently surpassed defense spending-a signal that alarmed several economists including Niall Ferguson, who called the current path “unsustainable.”
Despite its sharp rise over the past year, analysts believe gold's climb isn’t over. While short-term volatility may stem from geopolitical events, the broader macro narrative-debt, deficits, and de-dollarization-remains firmly intact.
“If you’re waiting for gold to collapse once the Middle East quiets down, you might be missing the bigger picture,” said Gundlach.
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