Citigroup research has raised its gold price forecast, expecting it to rise to $2,800 within 3 months and reach $3,000 within 6 to 12 months. The silver price forecast has also been raised to $40. Despite weak Asian demand, gold and silver have shown strong performance, influenced by the Fed rate cuts and the situation in the Middle East. The price of gold has risen by over 30%, hitting a historical high. Fund managers have increased their gold positions, while investors have added to their ETF holdings. Citigroup maintains a neutral bullish view on platinum and a bearish view on palladium
Citigroup Research stated in a report on Monday that it has raised its 3-month gold price forecast, citing the possibility of further deterioration in the US labor market, Fed rate cuts, and physical and ETF buying.
The bank has raised its 3-month gold price expectation from the previous $2700 per ounce to $2800, and added that its 6 to 12-month forecast is $3000. In addition, Citigroup has also raised its 6 to 12-month silver price forecast to $40 per ounce, up from $38.
The report stated: "We note that despite weak physical demand in Asia and the Fed cutting rates by 50 basis points last month with non-farm payrolls better than expected, gold and silver performance remains very strong." The report added that if oil prices surge due to recent tensions in the Middle East, gold prices should also rise.
On Monday, gold hit a historic high, while silver reached a nearly 12-year high, as uncertainties surrounding the US presidential election and the Middle East conflict intensified, exacerbating the gold rally driven by expectations of lower interest rates. However, during the US session on Monday, gold gave back all its intraday gains.
During Tuesday's Asian session, gold has rebounded to around $2730. Gold prices have risen over 30% so far this year, hitting consecutive all-time highs, with the rally intensifying as the Fed shifts to rate cuts. Escalating Middle East conflicts and the upcoming US election in a few weeks have also heightened safe-haven demand.
Kansas City Fed President Schmid stated that he supports slowing the pace of rate cuts, while his San Francisco counterpart Daly reiterated her view that further rate cuts are needed to guard against labor market deterioration.
Recently, fund managers have increased their net long positions in gold, while investors have been adding to their holdings of gold ETFs.
Regarding other metals, Citigroup stated that it remains neutral on platinum, with a three-month target price of $1025 per ounce and a 6 to 12-month target price of $1100 per ounce.
It added that given the recent rise in palladium prices, it is bearish on palladium, with a three-month target price of $1000 per ounce and a 6 to 12-month target price of $900 per ounce.
Citigroup also mentioned that the fundamentals of oil indicate an average price of $60 per barrel in 2025, but there is a high possibility of upward risk due to recent geopolitical tensions in the Middle East.
