Citi Predicts Gold Prices May Drop 25% Below $3,000 by 2026

Gold has experienced a record-setting rally, surging nearly 30% this year and reaching all-time highs above $3,400 an ounce, fueled by safe-haven demand amid geopolitical tensions, concerns about the US deficit, and consistent central bank buying. However, analysts at Citigroup predict this rally will end, forecasting that gold prices could fall to between $2,500 and $2,700 an ounce by the second half of 2026, representing a potential decline of up to 26%. The anticipated slump is attributed to weakening investment demand, improving global growth prospects, and expected Federal Reserve rate cuts. Citi analysts also highlight the influence of President Donald Trump's trade policies and US fiscal stimulus, which they believe will become less bearish, improving risk sentiment and reducing gold's appeal as a hedge. While some banks like Goldman Sachs and JP Morgan remain bullish, projecting prices above $3,400, Citi's forecast aligns with Wells Fargo's more cautious outlook. Additionally, competition from Bitcoin ETFs, which have attracted significant inflows this year, may also be contributing to gold's wavering momentum.