Bullion has soared 30% this year, setting a record high in April, as US President Donald Trump’s disruptive trade policies and the crisis in the Middle East spurred haven demand. The precious metal’s ascent has also been underpinned by concerns about the US deficit and assets, as well as by consistent buying by central banks as they sought to diversify reserves.
Declining investment demand for gold from the fourth quarter of 2025 may come from “any modest improvement in global growth confidence” as a stimulatory US budget takes effect, and Trump’s trade and other policies become less bearish, the Citi analysts said. Further, “we see a lot of scope for the Fed to cut from restrictive policy to neutral,” they added.
In the bank’s base case — which carried a 60% probability — gold was expected to consolidate above US$3,000 an ounce over the next quarter, then head lower. Its bull case — with 20% odds — flagged scope for a fresh record in the third quarter on concerns about tariffs, geopolitics and stagflation. The bear case — also at a 20% chance — saw a selloff, in part on speedy tariff resolutions.
Spot gold last traded near US$3,393 an ounce. Prices fluctuated on Tuesday, after Trump first called for an evacuation of Tehran amid the conflict between Israel and Iran, then departed from a Group of Seven summit early.
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In outlooks for other metals, Citi said it was very bullish on both aluminum and copper. The lightweight metal “is highly leveraged to an uptick in global growth and sentiment,” the analysts said.
