Citi has raised its three-month gold price target to $3,500 per ounce, up from $3,300, citing worsening U.S. economic indicators and renewed inflation risks.
The bank now expects gold to trade in a roughly $3,300 to $3,600 range as a mix of factors supports the metal. New tariffs announced by President Trump affecting dozens of countries, softer-than-expected labor market data that showed only 73,000 jobs added in July, and a weakening U.S. dollar are all contributing to a more favorable outlook for gold.
Market pricing has shifted toward a high likelihood of Federal Reserve easing, with traders assigning around an 81% chance of a September rate cut. That shift, coupled with rising concerns about institutional credibility, has helped drive investor demand for safe-haven assets. Since mid-2022, gold demand has climbed by more than one-third, and prices have roughly doubled over that period.
Analysts point to several channels through which these developments lift gold. A softer labor market and the prospect of lower interest rates reduce the opportunity cost of holding non-yielding assets like bullion. Meanwhile, a weaker dollar makes dollar-denominated commodities cheaper for holders of other currencies, providing additional buying support. Geopolitical and policy uncertainties—such as tariff expansions—also tend to push investors toward safe-haven allocations.
Despite Citi’s bullish near-term target, the bank’s projected trading range implies continued volatility. Price movements will depend on incoming economic data, Fed communications, and any further policy actions that affect currency and inflation expectations. For investors, the key considerations remain interest-rate trajectories, real yields, and demand from central banks and ETFs, all of which can quickly shift the supply-demand balance in the gold market.
In summary, Citi’s revised target reflects a combination of macroeconomic weakness, elevated inflation concerns, and heightened policy uncertainty. Those conditions have strengthened gold’s appeal as a hedge, pushing both demand and prices significantly higher since mid-2022, while leaving room for volatility as markets digest new data and policy signals.