Online Reporter
Gold is expected to sink back below US$3 000 an ounce in the coming quarters as a record-setting run peters out, according to Citigroup, calling time on one of the standout rallies in commodities.
“Our work suggests that gold returns to about US$2 500 to US$2 700 an ounce by the second half of 2026,” analysts including Max Layton said in a report.
The slump may be driven by weaker investment demand, improving global growth prospects and rate cuts by the Federal Reserve, they said.
Bullion has soared 30 percent this year, setting a record high in April, as US President Donald Trump’s disruptive trade policies and the crisis in the Middle East spurred haven demand.
The precious metal’s ascent has also been underpinned by concerns about the US deficit and assets, as well as by consistent buying by central banks as they sought to diversify reserves.
Declining investment demand for gold from the fourth quarter of 2025 may come from “any modest improvement in global growth confidence” as a stimulatory US budget takes effect, and Trump’s trade and other policies become less bearish, the Citi analysts said. Further, “we see a lot of scope for the Fed to cut from restrictive policy to neutral,” they added.
In the bank’s base case, which carried a 60 percent probability, gold was expected to consolidate above US$3 000 an ounce over the next quarter, then head lower. Its bull case, with 20 percent odds, flagged scope for a fresh record in the third quarter on concerns about tariffs, geopolitics and stagflation.
The bear case — also at a 20 percent chance — saw a selloff, in part on speedy tariff resolutions. — Bloomberg
