Gold could fall to below $3,000 an ounce by the end of the year, Citi has forecast, as investment demand wanes, from the current spot price of $3,391.
The bank cut its price target for the precious metal for the next one to three months to $3,300 per oz from a previous $3,500, and trimmed its 6-12 month target to $2,800 from $3,000.
Citi's base case is that gold prices remain between $3,100 and $3,500 in the third quarter, amidst continued elevated geopolitical tension, Trump's tariff policy updates and US budget concerns, before a downward trend begins later in the year.
"We see investment demand for gold abating in late 2025 and 2026, as ultimately, we see President Trump's popularity and US growth 'put' kicking in, especially as the US mid-terms come into focus," the US bank said in a note.
By the second half of next year, Citi suggested gold could pull back to $2,500-2,700 per oz.
If investment demand remains strong and geopolitical and economic tensions persist, Citi's bullish case scenario points to gold topping $3,500 per oz in the third quarter on stronger hedging and investment demand amid U.S. economic and geopolitical tensions.
But if Trump agrees to tariff deals, Middle East and other geopolitical risks ease, and more reassuring signs emerge for the US economy, this would be bearish for gold.
Citi sees prices potentially falling in this scenario to below $3,000. Emerging market central bank buying could support prices, however.