Citi revises short-term gold price forecast back to $3,500 amid geopolitical uncertainty

Citi raises its short-term gold price forecast to $3,500 per ounce, citing rising geopolitical risks and robust global demand, while advising caution on long-term prospects.

Citi has raised its short-term gold price target back to $3,500 per ounce, citing escalating tariffs and rising geopolitical tensions as key catalysts for the safe-haven asset. In a research note published Sunday, the investment bank projected gold to trade in the range of $3,100 to $3,500 over the next three months—up from its earlier forecast of $3,000 to $3,300 issued on May 12.

The revision comes in response to renewed market volatility after U.S. President Donald Trump threatened to impose a 50% tariff on the European Union beginning June 1, although the administration has since softened its stance.

Short-term upside, long-term caution

While reaffirming its bullish short-term view, Citi analysts remain cautious about gold’s longer-term trajectory. Two primary headwinds are cited: the possibility that U.S. economic growth and equity markets could unwind heading into the midterm elections—especially if the Federal Reserve continues to cut interest rates—and the observation that household gold holdings are now at their highest levels in 50 years, potentially limiting future demand.

Citi has maintained an optimistic outlook on gold since 2023. The bank initially raised its price target to $3,500 in April 2025, a level that was briefly breached on April 22 amid concerns over the Federal Reserve’s independence. However, as trade tensions temporarily subsided, Citi revised its target down to $3,150, which gold hit on May 15, reflecting a period of consolidation.

Outlook for 2025: range-bound but resilient

Looking ahead, Citi expects gold to stabilize near current levels, forecasting a trading range between $3,100 and $3,500 in the second half of 2025. The bank advises investors to consider tactical positioning over directional bets during this period, as the market is likely to remain range-bound.

The underlying fundamentals for gold remain strong. According to Citi, global spending on gold has reached 0.5% of world GDP—the highest share in five decades. This surge is attributed to persistent macroeconomic uncertainty driving investor interest in bullion, coupled with steady jewelry demand in key markets like India and China, even as prices hover at record highs.