Citigroup Inc. has predicted that the world’s leading safe haven asset, gold will reach $3,000 per ounce.

This announcement comes amidst a significant surge in investor interest in the precious metal, fueled by a myriad of factors ranging from geopolitical tensions to shifting monetary policies.

Analysts at Citigroup, led by Aakash Doshi, have upgraded their estimates for average gold prices in 2024 to $2,350, with a 40% upward revision in their 2025 prediction to $2,875.

They anticipate that trading will regularly test and surpass the $2,500 price level in the latter half of the year.

The rationale behind Citigroup’s optimistic outlook lies in several key factors. Firstly, the expectation of a Federal Reserve interest rate cut has spurred increased investor inflows into gold as historically low interest rates tend to make non-yielding assets like gold more attractive.

Also, ongoing conflicts in regions such as the Middle East and Ukraine have heightened geopolitical uncertainty, further bolstering gold’s appeal as a safe-haven asset.

Furthermore, central banks, particularly those in emerging markets, have been actively accumulating gold reserves, adding to the overall demand for the precious metal.

China, in particular, has demonstrated robust consumer demand for gold, further underpinning Citigroup’s bullish stance.

According to Citigroup analysts, the resurgence of inflows into gold-backed exchange-traded funds (ETFs) has played a significant role in supporting the climb towards the $3,000 mark.

This trend marks a departure from recent years, where such inflows were relatively subdued.

While Citigroup acknowledges the possibility of a pullback in prices around May or June, they anticipate strong buying support at the $2,200 per ounce threshold, suggesting that any dips in price may be short-lived.

The bank’s forecast aligns with sentiments expressed by other major financial institutions. Goldman Sachs Group Inc., for instance, has raised its year-end forecast for gold to $2,700, citing similar factors driving the commodity’s upward trajectory.

UBS Group AG also sees gold reaching $2,500 by the year’s end, further corroborating the bullish outlook shared by Citigroup.

As investors brace for what could be a historic rally in gold prices, Citigroup’s projection serves as a testament to the growing optimism surrounding the precious metal.

With geopolitical tensions simmering and central banks poised to enact accommodative monetary policies, gold appears poised to shine brightly in the months ahead, potentially realizing Citigroup’s ambitious target of $3,000 per ounce.

Oil prices fell on Monday as market participants reevaluated their risk premiums in the wake of Iran’s weekend attack on Israel, which the Israeli government said caused limited damage.

Brent crude oil, against which Nigerian oil is priced,  dipped by 50 cents, or 0.5%, to $89.95 a barrel while West Texas Intermediate (WTI) oil fell by 52 cents, or 0.6%, to $85.14 a barrel.

The attack, involving over 300 missiles and drones, marked the first assault on Israel from another country in more than three decades. It heightened concerns over a potential broader regional conflict impacting oil traffic through the Middle East.

However, Israel’s Iron Dome defense system intercepted many of the missiles, and the attack resulted in only modest damage and no reported loss of life.

Warren Patterson, head of commodities strategy at ING, noted that the market had largely priced in the potential attack in the days leading up to it. The limited damage and the absence of casualties suggest that Israel’s response may be more measured, which could help stabilize the oil market.

Iran, a major oil producer within OPEC, currently produces over 3 million barrels per day (bpd) of crude oil. The potential risks include stricter enforcement of oil sanctions and the possibility of Israeli targeting of Iran’s energy infrastructure, according to ING.

Nevertheless, OPEC possesses over 5 million bpd of spare production capacity, which could help mitigate any supply disruptions.

Analysts from ANZ Research and Citi Research have suggested that further significant impact on oil prices would require a material disruption to supply, such as constraints on shipping in the Strait of Hormuz. So far, the Israel-Hamas conflict has not had a notable effect on oil supply.

The market remains watchful of Israel’s response to the attack, which could influence the future trajectory of oil prices and broader geopolitical tensions in the region.

Nigeria’s crude oil production declined for the second consecutive month in March, according to the latest report from the Organization of Petroleum Exporting Countries (OPEC).

Data obtained from OPEC’s Monthly Oil Market Report for April 2024 reveals that Nigeria’s crude oil production depreciated from 1.322 million barrels per day (mbpd) in February to 1.231 mbpd in March.

This decline underscores the challenges faced by Africa’s largest oil-producing nation in maintaining consistent output levels.

Despite efforts to stabilize production, Nigeria has struggled to curb the impact of oil theft and pipeline vandalism, which continue to plague the industry.

The theft and sabotage of oil infrastructure have resulted in significant disruptions, contributing to the decline in crude oil production observed in recent months.

The Nigerian National Petroleum Company Limited (NNPCL) recently disclosed alarming statistics regarding oil theft incidents in the country.

According to reports, the NNPCL recorded 155 oil theft incidents within a single week, these incidents included illegal pipeline connections, refinery operations, vessel infractions, and oil spills, among others.

The persistent menace of oil theft poses a considerable threat to Nigeria’s economy and its position as a key player in the global oil market.

The illicit activities not only lead to revenue losses for the government but also disrupt the operations of oil companies and undermine investor confidence in the sector.

In response to the escalating problem, the Nigerian government has intensified efforts to combat oil theft and vandalism.

However, addressing these challenges requires a multi-faceted approach, including enhanced security measures, regulatory reforms, and community engagement initiatives.