In a note released on Monday, Citi Research increased its three-month prediction for gold prices, citing potential additional deterioration in the US labour market, Federal Reserve interest rate decreases, and physical and ETF purchases. In addition to stating that its six- to 12-month projection is $3,000, the bank raised its three-month gold price outlook from $2,700 to $2,800 per ounce.
It increased its six- to twelve-month prediction for silver prices from $38 to $40 per ounce.
“We note that gold and silver have performed extremely well despite weakening China retail physical demand and rising US interest rates since the Fed cut 50 (basis points) and payrolls beat last month,” the note said.
According to the report, gold should also increase if oil prices rise in response to a short-term escalation in the Middle East. Growing uncertainty around the US presidential election and the Middle East war contributed to yesterday’s gold gain, which was already driven by predictions of interest rate easing, while silver reached a near 12-year high.
With a three-month point price objective of $1,025 per ounce and a six- to 12-month target of $1,100 per ounce, Citi stated that it is still neutrally optimistic on platinum. With a three-month aim of $1,000 per ounce and a six- to 12-month target of $900 per ounce, it also stated that it is leaning pessimistic on palladium in light of the recent price increase.
Additionally, Citi stated that although oil fundamentals predict average prices of $60 per barrel in 2025, there is a significant chance of very short-term geopolitical escalation in the Middle East.
