Citi expects gold rally to end as demand wanes

Analysts at Citigroup Inc. believe gold will sink back below $3,000 as the yellow metal’s rally has run out of steam. 

This year, bullion has surged 30%, last setting a record in April. US President Donald Trump’s trade policies and tensions in the Middle East have boosted interest in safe-haven assets. Additionally, the rise in gold prices has been driven by demand from central banks, looking to diversify their reserves, and concerns about the US budget deficit. 

However, Citi forecasts the yellow metal’s prices to return to the range between $2,500 and $2,700 an ounce by the second half of 2026. The decline may be caused by weakening investment demand for gold at the end of this year and next year. Analysts also emphasize the impact of the expected US GDP growth and rate cuts by the Federal Reserve.

Citi’s base case scenario, with a probability estimated at 60%, sees the precious metal’s prices consolidating above $3,000 an ounce over the next three months. Then gold will head lower.