Citi Lowers Gold Price Targets on Peaking Market Deficit

In a client note, Citi analysts trimmed their near‑ and medium‑term gold price forecasts, citing a peaking market deficit and the prospect of waning investment demand. The bank now sees gold trading at $3,300/oz over the next three months (down from $3,500) and $2,800/oz in 6–12 months (from $3,000).

Why Citi Is Turning Cautious on Gold

1. Peaking Market Deficit

Citi’s research indicates that the supply shortfall driving gold’s recent run may have already topped out:

• Late‑April High: The $3,500 peak may mark the cycle high, as mine production and scrap supply catch up with demand.

• Base‑Case Scenario (60%): Gold falls below $3,000/oz by late 2025 or early 2026 amid stronger global growth confidence.

2. Potential Decline in Investment Demand

Investment flows into gold ETFs and futures could slow if:

• Economic Sentiment Improves: Modest global growth upticks reduce the appeal of safe‑haven bullion.

• Tariff and Geopolitical Risks Ease: A bear‑case (20% probability) sees gold slipping below $3,000/oz with quick conflict resolution and sustained U.S. economic strength.

Yet, Citi notes that investment demand as a share of mine supply remains historically high, offering support even under weaker price scenarios.

Forecast Ranges and Key Drivers

Time Frame

Old Target

New Target

Drivers

Next 3 months

$3,500

$3,300

Tariff policy changes, high geopolitical risk

6–12 months

$3,000

$2,800

Peaking deficit, improved growth outlook

What Can Move Gold Next?

• U.S. Tariff Policy Updates: Any fresh trade‑policy announcements could reignite safe‑haven demand.

• Geopolitical Flashpoints: Renewed Middle East tensions or other conflicts can spur short‑term rallies.

• U.S. Budget and Growth Data: Stronger‑than‑expected U.S. economic readings may undermine gold’s haven bid.

To track live spot and futures prices for bullion, use the Gold Commodities Data API for up‑to‑the‑minute quotes.

Bull, Base, and Bear Cases

• Bull Case (20% probability): Tariff/geopolitical re‑escalation or stagflation fears drive a renewed surge above $3,500/oz.

• Base Case (60%): Prices consolidate and drift below $3,000 as investment demand fades and growth confidence rises.

• Bear Case (20%): Quick conflict resolutions and robust U.S. economy push gold toward $2,800/oz or lower.

Investor Takeaways

1. Set Tactical Ranges: Position for consolidation between $3,100–$3,500/oz in the coming quarter.

2. Monitor Investment Flows: Watch ETF inflows and futures open interest for signs of shifting sentiment.

3. Stay Alert to Geo‑Politics: Short‑term spikes remain possible if trade or conflict risks resurface.

By combining Citi’s revised forecasts with real‑time data from the Gold Commodities Data API, investors can navigate the evolving gold market cycle and adjust exposure as key drivers unfold.