According to the latest research report released by global financial giant Citigroup (Citi), the bank has raised its gold price forecast for the next three months to a range of $3100 to $3500 per ounce, driven by heightened geopolitical tensions and rising trade protectionism. This is significantly higher than the previous forecast of $3000 to $3300 made on May 12.
The report indicates that the Trump administration's potential high tariffs on the EU serve as a short-term driver for safe-haven assets, while global instability factors, such as the Russia-Ukraine situation, continue to ferment. These factors propel investors to heavily invest in traditional safe-haven assets like gold. Currently, the spot price of gold is approximately $3347 per ounce, slightly lower than last Friday, having dropped by 0.4% on Monday after Brussels announced it would accelerate trade talks with Washington.
However, despite a short-term optimistic view, Citi holds a relatively pessimistic stance on the medium to long-term prospects for gold. The report clearly states that a significant correction in gold prices is expected in 2026 to 2027, based on two main reasons:
Firstly, the U.S. political cycle and monetary policy may mitigate global market risks over the next two years. If the Federal Reserve cuts interest rates as expected, it will stabilize economic growth, thereby diminishing the demand for gold as a safe haven;
Secondly, the global investor allocation to gold has reached a historically rare high. Currently, gold (including bars, coins, and jewelry) accounts for 3% of global household wealth, the highest level in 50 years, and the proportion of gold purchases relative to global GDP has risen to 0.5%, surpassing levels seen during the 1980 oil crisis.
Citi warns that an extreme "fully invested" state in gold often signals the market peak, especially when high-net-worth individuals' holdings are overly high. In the absence of new buying support in the future, it is easy to trigger a wave of profit-taking, leading to a reversal in gold prices.
In contrast, other major Wall Street banks are more optimistic. Goldman Sachs expects gold to challenge $4000 per ounce in 2026, while Deutsche Bank predicts it will surpass the $3700 mark next year. This divide in views reflects a clear division within Wall Street regarding the long-term trend of gold.
It is noteworthy that Citigroup first raised its short-term target to this level in April 2025 after gold briefly surpassed $3500. The price subsequently fell as U.S.-China trade tensions eased, prompting the institution to adjust its expectations. The current upward revision underscores its emphasis on short-term geopolitical impacts while maintaining a cautious judgment on the long-term supply-demand structure and market sentiment.
Looking ahead to the second half of the year, Citi anticipates gold prices will fluctuate significantly between $3100 and $3500, offering investors more tactical trading opportunities rather than a chance for long-term bullish positioning.
