CitiBank raised its three-month gold price forecast, citing several key factors, including a potential deterioration in the U.S. labor market, Federal Reserve trends toward cutting interest rates, and increased demand for gold, both physically and through exchange-traded funds (ETFs). According to a report issued on Monday, the gold price estimate was upgraded to $2,800 per ounce, up from $2,700 previously, with expectations that the price could reach $3,000 within 6 to 12 months.
On another note, silver price forecasts for the next 6 to 12 months were adjusted upward to $40 per ounce, compared to the previous estimate of $38 per ounce.
Despite weak physical demand for gold and silver in the Chinese market and rising U.S. interest rates following the Federal Reserve’s 50 basis point cut, both gold and silver showed strong performance, especially after last month’s job data exceeded expectations. The report also noted that in the event of a sudden spike in oil prices due to escalating tensions in the Middle East, gold prices are likely to continue rising.
Gold recently reached record highs, while silver approached a peak not seen in nearly 12 years. These increases are occurring amidst political uncertainty stemming from the U.S. presidential elections and ongoing conflict in the Middle East, which further supports the bullish trend for gold.
As for the oil market, the report highlighted that fundamentals point to an average price of around $60 per barrel in 2025. However, short-term geopolitical risks in the Middle East remain high, potentially leading to unexpected price fluctuations.
