Citigroup Bearish on Future Gold Market

According to a report from Mining.com, Citigroup expects that in the coming quarters, after reaching new highs, gold prices will gradually cool off and fall below $3,000 per ounce.

Citigroup attributes this mainly to weakening investment demand, improving economic prospects, and a reduction in US interest rates.

In a recent report, Citigroup analysts led by Max Layton forecast that in H2 2026, gold prices will fall to a range of $2,500 to $2,700 per ounce.

This stands in stark contrast to bullish forecasts from other major financial institutions. Goldman Sachs expects gold prices to reach $3,700 per ounce later in 2025 and $4,000 per ounce by mid-2026, primarily considering central bank gold-buying demand. Similarly, Bank of America expects gold prices to climb to $4,000 per ounce next year.

So far this year, gold prices have risen by 30%. Influenced by geopolitical tensions and US policy instability, they hit an all-time high in April.

However, Citigroup believes that a recovery in investor confidence and a reduction in US fiscal concerns may weaken demand.

As of Tuesday, the spot price of gold was around $3,388 per ounce, with fluctuations mainly due to tensions in the Middle East and shifts in US foreign policy.

Under the base case scenario (with a 60% probability), Citigroup expects gold prices to stabilize above $3,000 per ounce next quarter before declining.

In the bank's bullish scenario (with a 20% probability), if geopolitical tensions and economic instability persist, gold prices will reach new highs.

In the bearish scenario (with a 20% probability), assuming a de-escalation of tariff conflicts and a shift in Trump administration policies, gold prices will fall.

Although the report primarily focuses on the macroeconomic aspects of gold, Citigroup analysts also highlighted bullish prospects for other metals, particularly aluminum and copper.