Citi Flips from Bear to Bull on Gold? New Upside Seen as Record Highs Come Into View!

TradingKey - Following recent U.S. economic data releases and the unexpected escalation in tariff rates, Citigroup has made a dramatic shift in its gold outlook — turning from a long-time bear to a bullish stance. The bank has significantly raised its gold price target to $3,500 per ounce, reflecting deepening concerns over the U.S. economic and inflation outlook.

In its latest report, Citi cited a combination of slowing economic growth, weak nonfarm payrolls, and tariff-driven inflationary pressures as new catalysts for gold’s upward momentum.

Just months ago, the bank predicted gold could fall below $3,000. Now, it has raised its three-month price target from $3,300 to $3,500, with its trading range upgraded to $3,300–$3,600. Citi noted that the U.S. added only 73,000 jobs in July, far below expectations, and that prior months were revised down by over 250,000 jobs — fueling market expectations for a September Fed rate cut. Interest rate futures now price in an 81% probability of a rate cut at the upcoming meeting.

Geopolitical risks are also playing a key role. With the Russia-Ukraine conflict unresolved and the Trump administration pushing forward with high tariffs — including proposed duties of 25% to 50% on imports from Brazil, India, and Canada — markets are becoming increasingly sensitive to inflation once again, reinforcing gold’s appeal as a hedge.

Citi also highlighted that global gold demand has grown by over one-third since mid-2022, driven by sustained central bank purchases, rising investment inflows, and resilient jewelry demand. As the U.S. dollar weakens and rate cut expectations grow, gold’s attractiveness as an asset is likely to strengthen further.

This abrupt reversal by Citi underscores how quickly the macro environment is shifting — and highlights that the gold market is now navigating a complex interplay of policy shifts and investor sentiment.