Citigroup has revised its near-term outlook for gold, lowering its three-month price target to $4,000 per ounce from $4,300. The adjustment reflects a more cautious stance as several tailwinds that previously propelled the precious metal to record highs begin to fade.
In a research note published Monday, the bank's commodities team pointed to improving macroeconomic conditions, moderating investor demand, and easing geopolitical tensions as key factors limiting further upside in the near term. The revision comes after a period of strong performance for gold, which had been buoyed by safe-haven buying and uncertainty surrounding global trade and monetary policy.
Macro Headwinds Cap Gold's Near-Term Upside
According to Citi, the combination of stabilizing real yields, a firmer bias for the U.S. dollar, and declining safe-haven premiums has created a less favorable environment for gold. The analysts noted that physical demand from central banks has moderated, while inflows into gold-backed exchange-traded funds have also slowed, reducing a key source of support.
“Near-term upside looks capped unless we see a fresh shock,” the analysts wrote. The bank's revised forecast marks a notable shift from its more bullish stance earlier this year, when heightened geopolitical risks and market uncertainty supported expectations for higher precious metals prices.
However, Citi has not completely abandoned its constructive outlook. The bank noted that gold could still trade above $4,000 during the summer if economic conditions deteriorate significantly or if inflation accelerates again.
Longer-Term View Remains Intact
Despite lowering its short-term target, Citi left its six-to-12-month gold forecast unchanged at $4,500 per ounce. The bank said that longer-term upside remains possible if the Federal Reserve adopts a more dovish policy stance or if geopolitical tensions intensify once again.
The latest adjustment follows a period of aggressive upgrades. On January 13, Citi strategists led by Kenny Hu raised their zero-to-three-month gold target to $5,000 per ounce and their silver target to $100 per ounce, citing heightened geopolitical risks, physical market shortages, and renewed uncertainty on Fed independence. Gold and silver subsequently reached new record highs during the year.
Silver and Industrial Metals Still Favored
While gold remains a key focus, Citi continues to believe silver could outperform the yellow metal over time. The bank reiterated its longstanding view that the broader precious metals rally would eventually broaden into industrial metals.
“Our longstanding call for silver to outperform and for the precious metals bull market to broaden into industrial metals and for industrial metals to take centre stage over the same periods has worked well,” strategists wrote. Citi remains constructive on aluminum and copper, which it expects to perform well during the second half of 2026.
For context, silver recently tumbled to a two-month low as rising yields and hawkish Fed bets weighed on the metal. Meanwhile, gold rose 0.7% to $4,461 earlier this week, driven by dollar weakness and lower oil prices.
The broader macroeconomic landscape continues to influence precious metals. The dollar retreated as talks over the Strait of Hormuz eased safe-haven demand, while oil rebounded. These dynamics underscore the shifting sentiment that Citi's revised forecast reflects.
This article is for informational purposes only and does not constitute financial advice.
