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.
