Citi Research Raises Gold Price Forecast

(Reuters) – Citi Research has increased its three-month forecast for gold prices, attributing the change to potential deterioration in the U.S. labor market, anticipated interest rate cuts by the Federal Reserve, and increased buying from both physical markets and ETFs. In a note released on Monday, the bank raised its three-month gold price outlook to $2,800 per ounce from a previous estimate of $2,700. Additionally, the 6 to 12-month forecast has been adjusted to $3,000.

The bank has also revised its 6 to 12-month forecast for silver prices upward, now predicting $40 per ounce instead of $38.

According to the note, "We note that gold and silver have performed extremely well despite weakening China retail physical demand and rising U.S. interest rates since the Fed cut 50 basis points and payrolls beat last month."

Additionally, gold is expected to rise if oil prices spike due to near-term escalation in the Middle East.

Gold reached a record high on Monday, while silver hit a nearly 12-year peak. This surge is attributed to growing uncertainties surrounding the U.S. presidential election and ongoing conflict in the Middle East, which have contributed to the rally alongside expectations of interest rates easing.

Citi Research maintains a neutral-bullish stance on platinum, with a three-month price target of $1,025 per ounce and a 6 to 12-month target of $1,100. Conversely, the bank is bearish on palladium following recent price increases, with a three-month target of $1,000 per ounce and a 6 to 12-month target of $900.

Lastly, Citi indicated that oil fundamentals suggest an average price of $60 per barrel by 2025, though the potential for near-term geopolitical escalation in the Middle East remains significant.