Citigroup expects the price of gold to fall back below $3,000 per ounce in the coming quarters, as the record-breaking rally that was considered one of the most significant bullish movements in the commodities market comes to an end, according to Bloomberg.
Analysts at the bank, including Max Leighton, wrote in a research report that “our study indicates that gold prices will return to a range of $2,500 to $2,700 per ounce by the second half of 2026.”
They noted that this decline may be driven by weak investment demand, improved global growth prospects, and potential interest rate cuts by the Federal Reserve.
Gold has jumped 301% since the beginning of the year, hitting its last record high in April, supported by safe-haven demand amid US President Donald Trump's confusing trade policies and the escalating crisis in the Middle East.
Concerns about the US deficit and financial assets, along with continued purchases by central banks to reduce their reliance on the dollar, have also fueled the precious metal's rise.
Analysts at Citigroup said, "We expect investment demand for gold to decline in late 2025 and throughout 2026, as we believe Trump's popularity and a recovery in US growth may restore balance, especially as the midterm elections approach."
They added: "We see ample room for the Federal Reserve to move from a restrictive to a neutral policy."
In the bank's base case scenario, which carries a probability of 60%, gold is expected to hold above $3,000 per ounce over the next quarter before beginning to decline.
The spot price of gold reached about $3,396 in the last trading session.
Regarding the outlook for other metals, Citigroup expressed a strong positive outlook for both aluminum and copper.
Analysts believe that aluminum, as a lightweight metal, is “highly correlated with any improvement in global growth and market sentiment.”
