(Kitco News) - Although gold continues to consolidate around $3,300 an ounce, it hasn't seen the last of its record highs, according to the latest comments from commodity analysts at Citigroup.
In a report published Sunday, Citi upgraded its near-term gold forecast, now expecting prices to trade between $3,100 and $3,500 within the next three months—up from its previous May 12 estimate of $3,000 to $3,300 an ounce.
The upgrade came after President Donald Trump unleashed a new salvo in the global trade war, threatening to impose 50% tariffs on all European imports as early as June 1. Trump later walked back his threat, stating that the European Union has until July to make a trade deal.
Although fears of a heightened trade war have diminished, analysts note that Trump’s actions last week highlight the persistent uncertainty in the global economy. They also point out that the world is now past the halfway mark of last month’s 90-day pause on broad trade tariffs, with no major deal announced.
While Citi remains bullish on gold in the near term, anticipating a return to record highs, it maintains a cautious long-term outlook.
The analysts noted that gold could struggle through the end of 2025 into 2026 as economic activity picks up and the Federal Reserve begins to cut rates, providing support to beleaguered equity markets. Citi also believes that next year’s rapidly approaching midterm elections could bolster risk-on sentiment, reducing gold’s appeal as a safe-haven asset.
Additionally, Citi cautions that the gold market may be approaching saturation, despite historically strong underlying demand. The analysts highlighted that approximately 0.5% of global GDP is currently being spent on gold—the highest proportion in five decades.
Citi observed that investment demand has increased due to a combination of heightened uncertainty and the absence of a formal recession, particularly in India and China. This has supported jewelry demand despite elevated prices.
Citi’s latest gold price forecast is relatively cautious compared to projections from other major financial institutions. Bank of America, Goldman Sachs, Natixis, and VanEck have all indicated that gold could reach $4,000 an ounce this year or in early 2026.
Although investment demand has surged in the first four months of the year, holdings in gold-backed exchange-traded funds remain well below the peak seen in 2020.
