Citi raises gold forecast to $3,500/oz over next 3 months on negative US outlook

Citi raised its gold price forecast over next three months to $3,500 per ounce on Monday from $3,300, and the expected trading range to $3,300–$3,600 from $3,100–$3,500, on the belief that near-term US growth and inflation outlook has deteriorated.

"US growth and tariff-related inflation concerns are set to remain elevated during 2H'25, which alongside a weaker dollar, are set to drive gold moderately higher, to new all-time highs" the bank said.

Last week, US President Donald Trump imposed steep tariffs on exports from dozens of trading partners, including Canada, Brazil, India and Taiwan.

The tariffs imposed last week on scores of countries are likely to stay in place rather than be cut as part of continuing negotiations, Trade Representative Jamieson Greer said on CBS show "Face the Nation" aired on Sunday.

Last week, the dollar weakened after nonfarm payrolls increasing by 73,000 jobs last month, after rising by a downwardly revised 14,000 in June, which revived hopes of a Fed rate cut in September, with markets now pricing in an 81% chance, per CME FedWatch tool

Citi also highlights weaker US labor data in second quarter of 2025, institutional credibility concerns have increased regarding the Federal Reserve and US statistics, and elevated geopolitical risks related to the Russia-Ukraine conflict.

Gold, traditionally considered a safe-haven asset during political and economic uncertainties, tends to thrive in a low-interest-rate environment.

Citi estimates gross gold demand has risen over one-third since mid-2022, nearly doubling prices by the second quarter of 2025.

The strength in gold demand was driven by strong investment demand, moderate central bank buying and resilient jewellery demand despite higher prices, the bank added.

Spot gold was trading at $3,356.88/oz at 0340 GMT on Monday.