Famous American Economist Predicts the Next Gold Surge!

Rising geopolitical tensions and concerns about the future of the global economy have shifted investor behavior and redirected capital toward private-sector assets. Martin Armstrong, the American economist known for studying economic cycles and forecasting financial market trends, believes this shift could pave the way for another price surge [...]

The increase in geopolitical tensions and concerns about the future of the global economy have changed the behavior of investors and led the flow of capital towards private sector assets. Martin Armstrong, a well-known American economist who is known for studying economic cycles and predicting the trend of financial markets, believes that this change can lead to a jump in the price of gold again.

According to a report from Mining.com, this famous analyst believes that the recent drop in the price of gold is not necessarily a sign of the end of its upward trend. Referring to the increase in political and economic risks, he announced the possibility of changing the direction of the market in the coming months. In this article, we will take a look at the reasons for this prediction and Armstrong's view on the future of the gold price.

Armstrong's prediction since the beginning of gold's rebound The recent decline in the price of gold has raised the question of whether the bullish trend of the precious metal is over or not. Armstrong believes that the decline in gold prices is more due to a temporary easing of concerns over geopolitical tensions and not necessarily a sign of a change in the market outlook.

Referring to his computer model, he predicts that from the first quarter of 2027, that is, between January and March, the tables will turn in favor of gold.

Explaining this forecast, Armstrong said: "This drop is only an initial floor, and especially from the first quarter of next year, the market trend will rise again." Our computer model shows that tensions have not subsided yet. At that time, capital flows to the private sector will accelerate and the price of gold will begin to rise again.

According to him, although geopolitical concerns have somewhat decreased at the moment, the main risks still remain and as they become more serious, investors will once again pay attention to gold.

Armstrong's historical flight of capital from government debt to the private sector points to an important shift in investor behavior to explain his prediction. In an interview with Top of Mine, he explained that during the Great Depression of 1929, investors were moving their money out of the private sector and into the public sector. But now this trend is completely reversed.

Armstrong described the process of wealth transfer as follows: What I have always emphasized is that capital is flowing to America, but it is going to the private sector, not the public sector. Historically, whenever both sides reach extremes, collapse occurs.

This apparent reversal suggests that the confidence of major investors in the ability of governments to repay debt has been severely eroded and that the attractiveness of private sector stocks, commodities and real assets is increasing.

Armstrong believes that this change in capital flow is one of the important factors that can help the growth of gold prices in the coming months.

How do European tensions affect the future of gold?

According to Armstrong, the situation in Europe is more worrying. He believes that European countries have gradually realized the inefficiency of the European Union, and at the same time, the increase in military tensions can increase the cost of government borrowing.

He warned about the direct relationship between war and financial markets: Europe cannot be expected to beat the war drum and reduce long-term interest rates at the same time; Interest rates always jump during wartime and inflation rises along with it. The bond market acts completely neutral and shows us the real truth of the story.

With the increase in yield and interest rate of bonds, the financial burden of governments has become heavier and investors show less desire to keep these bonds with negative real yield.

He also mentioned the upcoming elections in America, Israel and Ukraine and believes that these developments can increase investors' concern about the political and economic future of the world.

Gold price forecast; Is it possible to correct up to $3,500?

Despite predicting a rise in gold from early 2027, Armstrong does not rule out the possibility of further price declines in the near term.

According to him, if the price of gold closes below the level of $4,000 at the end of the week, it may go down to the range of $3,500 to $3,700. However, he believes that there is not much time left to continue this reform.

Armstrong explained about this: The issue is not only to what level the price will decrease, but the time is also important. There is a limited opportunity for this correction to occur. There are many geopolitical risks facing the market and when investors realize the dimensions of these risks, the price of gold will jump.

So in Armstrong's scenario, gold may experience further declines before starting to rise again. However, he expects the market trend to change as geopolitical concerns increase and the price will rise again.

How do global tensions affect the future of gold prices?

From Armstrong's point of view, the future of the price of gold depends more than anything on political developments and the extent to which investors worry about global tensions. He believes that although there is a possibility of further price reduction in the short term, as geopolitical risks increase, more capital will move towards the private sector and gold can resume its upward trend.