Is gold repeating the "2008 script"? Wall Street giants are bullish up to $11,400!

Cailian Press March 25 report (Edited by Huang Junzhi): During the recent U.S.-Iran war, gold not only didn’t “get carried,” but also dropped sharply and even briefly entered a bear market region. However, this doesn’t seem to have completely extinguished analysts’ optimistic sentiment.

Peter Schiff (Peter Schiff), a famous economist on Wall Street, CEO and Chief Global Strategist at Euro Pacific Capital, believes that the current selloff in gold is playing out the script of the “2008 global financial crisis,” and he has boldly predicted that gold will rebound to $11,400 afterward.

Gold prices set a historical high of $5,608 per ounce in January this year. After that, they fell sharply. As of the time Schiff posted, the trading price was about $4,462 per ounce, down about 27% from the peak. Even so, compared with a year ago, gold prices are still up nearly 48%.

Specifically, Schiff’s reasons for being bullish on gold are based on historical comparisons with global financial crises.

He wrote on his social media platform X: “In the early stages of the 2008 global financial crisis, gold prices crashed 32%, accounting for about 40% of the gains from the prior bull run. After bottoming and bouncing back, gold then surged 178% over the following three years.”

“Today, gold once fell to around $4,100, down 27%, which also accounts for about 40% of the gains since $2,000. If it rebounds 178% from the low point, the gold price will reach $11,400.” He added.

Interestingly, these figures nearly match almost perfectly— the percentage that gold is currently pulling back from its January peak is comparable to the initial drop in gold at the start of the 2008 crash, and after that, gold began one of the greatest bull markets in history.

War: a tailwind or a headwind for gold?

At present, the market is uneasy about whether a ceasefire or a peace agreement would erode gold’s geopolitical premium, and Schiff firmly pushes back on this.

“If the war ends quickly, that would be negative for gold. But that’s not enough to offset all the positives. In addition, the government still needs to pay for additional weapons and the costs of rebuilding the areas that were destroyed. Therefore, compared with a situation in which no war ever happened, the fiscal deficit and inflation would be larger,” he explained.

And even before the current drop in gold prices, he had already put forward similar views, noting that if one was bullish on gold before the war, one should be even more bullish now.

“War means the U.S. fiscal deficit skyrockets, food and energy prices surge, the economy falls into recession, unemployment rises, stock, bond, and real estate prices collapse, terrorist activity increases, and there is a financial crisis,” he added.

Misjudging the Federal Reserve

Schiff also criticized the logic behind this selloff. He believes traders made a fundamental mistake: they sold gold out of concern that persistent inflation would prevent the Federal Reserve from cutting interest rates.

“Selling gold because rising inflation would prevent the Federal Reserve from cutting rates, when interest rates are already too low, makes no sense,” he wrote: “Falling real rates are good for gold, but what really needs rate cuts is the stock market.”

He predicts that once high interest rates push the economy into recession, the Federal Reserve will change course—cut rates and restore quantitative easing—an action that would be a strong tailwind for gold.

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