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Investing.com -- Citi raised its three-month gold price forecast to $3,500 an ounce on Monday, up from $3,300, and lifted its expected trading range to $3,300–$3,600 from a prior $3,100–$3,500. The upward revision reflects the bank’s view that the near-term U.S. growth and inflation outlook has worsened.
“U.S. growth and tariff-related inflation concerns are set to remain elevated during 2H’25, which alongside a weaker dollar, are set to drive gold moderately higher, to new all-time highs,” Citi said in a note seen by Reuters.
The move comes after U.S. President Donald Trump introduced sweeping tariffs on exports from several key trade partners, including Canada, Brazil, India, and Taiwan.
Gold, often seen as a safe-haven asset during economic or geopolitical stress, also benefits from a weaker dollar and expectations of lower interest rates.
Citi estimates that total gold demand has climbed by over 30% since mid-2022, helping to nearly double the metal’s price by the second quarter of 2025. The bank attributed this to robust investor inflows, moderate purchases by central banks, and solid jewellery demand despite the elevated price levels.
On Monday, spot gold edged 0.1% lower to $3,360.2 per ounce by 09:38 GMT, as some investors took profits following Friday’s sharp gains. Bullion had jumped more than 2% after weaker U.S. employment data revived hopes for a rate cut by the Federal Reserve in September. U.S. gold futures were up 0.4% at $3,412.31.
Last week, the latest jobs report showed a gain of just 73,000 nonfarm payrolls in July, following a downward revision for June. As a result, market expectations for a September rate cut have risen to 81%, according to the CME FedWatch tool.