Citibank: "Gold Prices Will Fall Below $3,000 Next Year"

"Gold demand will decrease if the US economy recovers and geopolitical crises ease"

"In Q3 this year, prices will move between $3,100 and $3,500"

Citibank has lowered its short- and long-term price targets for gold despite the rising geopolitical risks. This is due to expectations that the US's tariff policy will change as the US midterm elections approach, and that the global economic growth outlook will improve.

According to Reuters on the 17th (local time), Citibank expects that, due to declining investment demand and an improved outlook for global economic growth, gold prices could fall below $3,000 per ounce by the end of 2025 or early 2026.

Citi has lowered its 3-month gold price target from $3,500 per ounce to $3,300, and its 6-12 month target from $3,000 per ounce to $2,800.

However, it projected that, in Q3 this year, due to geopolitical risks, volatility in the US's tariff policy, and US budget concerns, gold prices would remain between $3,100 and $3,500 per ounce. The decline is expected to begin thereafter.

The bank stated, "Investment demand for gold is expected to decrease in late 2025 and 2026." This is because US economic growth is expected to pick up as the midterm elections approach. Accordingly, gold is predicted to fall to $2,500-$2,700 per ounce in the second half of 2026.

According to Citibank's (bullish) scenario for gold, if the US economy enters a recession and geopolitical tensions persist, strong hedge fund activity and investment demand could push gold prices above $3,500 per ounce in Q3 this year.

On the other hand, in the (bearish) scenario, if tariff disputes are resolved, geopolitical risks subside, and the US economy avoids a hard landing, gold prices could fall below $3,000 per ounce. Even so, if emerging market central banks increase their buying, the decline could be limited. However, the chances of either the bullish or bearish cases are said to be only about 20% each.

In contrast to its cautious outlook on gold, Citi projects that silver prices will rise to $40 per ounce over the next 6-12 months, supported by reduced supply and robust demand.

Citi added that, if the bullish scenario materializes thanks to a swift resolution of the US-China trade war and a strong policy stance by the Federal Reserve System, silver could reach $46 per ounce in Q3 this year.

Jung-Ah Kim, contributing reporter, kja@hankyung.com