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Investing.com -- Citi said it has lowered its near- and medium-term gold price targets, citing a peaking market deficit and a potential decline in investment demand.
In a note to clients, Citi said it now expects gold to trade at $3,300 per ounce over the next three months, down from a prior forecast of $3,500.
Its 6-12 month target was also reduced to $2,800 per ounce, from $3,000.
"We expect gold prices to continue consolidating around $3,100-$3,500/oz over the coming quarter, as the world digests U.S. tariff policy changes, geopolitical risks remain high, and U.S. budget and growth concerns remain elevated," Citi analysts wrote.
While Citi acknowledged the potential for short-term strength, it warned that the late April peak around $3,500 per ounce may have marked the top of the current cycle.
“Our work suggests that we may have already seen the highs... as the gold market deficit is peaking soon if not already,” they said.
In its base-case scenario (60% probability), Citi expects gold to break below $3,000 per ounce by late 2025 or early 2026, as investor demand wanes and economic sentiment improves.
“Declining investment demand from 4Q’25... can come from any modest improvement in global growth confidence,” the analysts wrote.
Still, in its bull case (20% probability), Citi sees a renewed surge if “tariff/geopolitical re-escalation” or fears of stagflation emerge. Conversely, in the bear case, gold could slip below $3,000 amid quick conflict resolutions and sustained U.S. economic strength.
Despite a cautious outlook, Citi noted that “investment demand as a share of mine supply” remains historically elevated, helping to keep prices supported even in weaker scenarios.
