(Kitco News) - Gold’s nearly 30% rally this year has attracted significant bullish attention, as a growing number of analysts look toward $4,000 an ounce. However, not all banks are bullish on gold.
In a report published this week, commodity analysts at Citigroup lowered their gold price forecast and warned investors that the precious metal could fall below $3,000 an ounce by the end of the year.
In the updated report, the bank revised its 0–3 month target to $3,300 from its previous estimate of $3,500 an ounce. At the same time, it lowered its 6–12 month gold price forecast to $2,800 per ounce from $3,000.
Spot gold last traded at $3,369.54 an ounce, roughly unchanged on the day. Citi’s year-end target would represent a 16% decline from current prices.
The analysts said they expect gold’s safe-haven allure to diminish heading into 2026 as economic conditions improve.
“We see investment demand for gold abating in late 2025 and 2026, as ultimately, we see President Trump's popularity and U.S. growth 'put' kicking in, especially as the U.S. midterms come into focus," the analysts said in the note.
While economic uncertainty remains elevated, there is growing optimism that the U.S. can avoid a recession and that inflationary pressures will be contained.
A major factor behind Citi’s bearish gold outlook is U.S. monetary policy, as they expect the Federal Reserve to eventually cut interest rates, which would support economic growth.
Looking at different scenarios, the analysts said that in their bullish outlook, heightened geopolitical turmoil and trade-related economic uncertainty and weakness could push gold prices above $3,500 an ounce in the third quarter of this year.
On the flip side, in the bearish scenario, a resolution to the global trade war and easing geopolitical tensions could push prices below $3,000 an ounce. However, Citi assigns only a 20% chance of either of these scenarios playing out.
Citi analysts may be bearish on gold; however, they are not giving up on the precious metals sector, as they see significant potential in silver.
The bank sees silver prices rising to $40 per ounce over the next 6–12 months, driven by tightening availability and robust demand.
The analysts also noted that, in their bullish scenario, silver could potentially reach $46 per ounce by the third quarter of 2025, driven by a quick resolution to the global trade war.
