Gold Forecast Soars: Citi Predicts $3,500/oz Price Amid Negative US Economic Outlook

Gold has always been a safe place for money when economies feel shaky. Right now, it is back in the spotlight. Citi, one of the world’s biggest banks, has predicted that gold could climb to $3,500 per ounce in the coming months. This bold call comes at a time when the US economy shows signs of slowing down. Inflation pressures, high national debt, and a softer dollar are pushing more investors toward gold. We are already seeing prices hovering around $2,400–$2,500 per ounce, close to recording highs. As uncertainty spreads through global markets, this forecast could mark a major shift in how we view gold’s role in protecting wealth.

Current Gold Market Overview

• Gold has surged nearly 40% in the past year, jumping from about $2,409/oz last August to over $3,350/oz now.
• In the first half of 2025, gold rose about 26%, making it one of the best-performing major assets.
• ETF holdings climbed by nearly 400 tonnes, pushing total assets under management to around USD383 billion.
• At the same time, central banks purchased 166 tonnes of gold in Q2, while jewelry demand in China and India saw a significant decline.

Citi’s $3,500 Forecast: Key Drivers

• Citi increased its 0–33-month gold forecast to $3,500 per ounce, up from $3,300, and widened the projected trading band to $3,300–$3,600.
• Citi points to multiple factors, including slowing U.S. growth, tariff‑driven inflation pressures, and a weakening dollar.
• Sluggish labor data, just 73,000 jobs added in July, have driven markets to price in an 81% chance of a Fed rate cut in September.
• Citi also points to risks facing Fed credibility and recurring global tensions, especially around Russia-Ukraine and ongoing trade policies.

US Economic Outlook and Its Link to Gold

• July payrolls data came in well below expectations, just 73,000 jobs, and June was revised down sharply, triggering fears of a slowdown.
• Markets now expect rate cuts totaling 65–100 basis points by year-end.
• This drop in confidence fuels demand for low-yield assets like gold. When growth cools, gold becomes more attractive.

Global Factors Affecting Gold

• Central banks remain net buyers: Q2 demand rose 3% year-on-year, to 1,249 tonnes, with 166 tonnes added by banks alone.
• ETF inflows reached 170 tonnes in Q2, adding to the overall increase in gold demand.
• Geopolitical tensions, from global trade friction to the Russia‑Ukraine conflict, are heightening investor appetite for safe assets.
• Supply remains stable, with mine output slightly up and recycling modestly higher, keeping overall supply-demand balanced.

Technical and Market Sentiment Analysis

• Spot gold traded around $3,355–$3,356/oz recently, even after small profit-taking pullbacks (~0.3%).
•  Futures data indicate solid investor positions, reflecting expectations of further Federal Reserve rate cuts.
• Key support zones lie near $3,300/oz, with resistance toward $3,400–$3,600 if momentum holds.

Broader Implications

• ETFs, institutional investors, and miners stand to be most affected if gold climbs toward Citi’s higher range.
• Rising prices may encourage further accumulation by central banks and official buyers.
• However, a turnaround in U.S. growth or inflation could blunt gold’s momentum later this year. Citi itself sees a bearish scenario where gold drops below $3,000 in late 2025.

Conclusion

Citi’s bold $3,500/oz gold forecast reflects a blend of soft U.S. growth, weak labor data, tariff-driven inflation expectations, and geopolitical risk. Gold is currently trading above $3,350, a new zone of high interest and safe-haven demand. As we head into the rest of 2025, watching Fed signals, inflation prints, and central bank buying will be key. If conditions worsen, Citi’s range of $3,300–$3,600/oz may prove prescient.

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Disclaimer:

This is for information only, not financial advice. Always do your research.