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Gold has jumped about 27% in 2025, amid heightened geopolitical tensions. Factors such as former President Donald Trump’s trade policies, escalating conflict in the Middle East, and persistent U.S. deficit concerns have boosted safe-haven buying. Plus, central banks have played a key role, increasing their gold reserves as part of diversification strategies.
Can the Rally Last?
Citigroup Inc. expects gold prices to retreat below $3,000 an ounce in the coming quarters, signaling a potential end to one of the most notable commodity rallies in recent years. In a recent report, analysts including Max Layton projected bullion to fall to a range of $2,500 to $2,700 by the second half of 2026, as quoted on Bloomberg.
Drivers of the Likely Decline: Fed Cuts and Rebounding Growth
According to Citi, the anticipated slide in gold prices may stem from weaker investment demand, a rebound in global economic growth, and interest rate cuts by the Federal Reserve. As global economic confidence improves and the Fed shifts from a restrictive to a neutral policy stance, demand for safe-haven assets like gold may wane.
Outlook Hinges on Global Conditions and Policy Shifts
Citi sees declining investment interest starting in late 2025, and the impact of a stimulative U.S. fiscal budget. As Trump's policy posture potentially softens, and global risks stabilize, the bullish narrative for gold may fade.
The bull case (20% probability) sees a potential new high in Q3 2025 if fears around tariffs, geopolitical instability, and stagflation intensify. Meanwhile, the bear case (20%) envisions a sharper selloff, driven partly by a swift resolution of tariff disputes.
Current Prices and Market Reactions
As of the latest trading session, spot gold was trading at around $3,381 an ounce, experiencing volatility. This followed Trump’s call for a Tehran evacuation amid the Israel-Iran conflict, and his abrupt departure from a G7 summit.
ETFs in Focus
Against the above-mentioned backdrop, gold-backed exchange-traded funds (ETFs) like SPDR Gold MiniShares Trust (GLDM - Free Report) , iShares Gold Trust (IAU - Free Report) , iShares Gold Trust Micro (IAUM - Free Report) , GraniteShares Gold Trust (BAR - Free Report) and Goldman Sachs Physical Gold ETF (AAAU - Free Report) should be monitored closely.
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Gold Up 27% YTD: How Long Will the Rally Last?
Gold has jumped about 27% in 2025, amid heightened geopolitical tensions. Factors such as former President Donald Trump’s trade policies, escalating conflict in the Middle East, and persistent U.S. deficit concerns have boosted safe-haven buying. Plus, central banks have played a key role, increasing their gold reserves as part of diversification strategies.
Can the Rally Last?
Citigroup Inc. expects gold prices to retreat below $3,000 an ounce in the coming quarters, signaling a potential end to one of the most notable commodity rallies in recent years. In a recent report, analysts including Max Layton projected bullion to fall to a range of $2,500 to $2,700 by the second half of 2026, as quoted on Bloomberg.
Drivers of the Likely Decline: Fed Cuts and Rebounding Growth
According to Citi, the anticipated slide in gold prices may stem from weaker investment demand, a rebound in global economic growth, and interest rate cuts by the Federal Reserve. As global economic confidence improves and the Fed shifts from a restrictive to a neutral policy stance, demand for safe-haven assets like gold may wane.
Outlook Hinges on Global Conditions and Policy Shifts
Citi sees declining investment interest starting in late 2025, and the impact of a stimulative U.S. fiscal budget. As Trump's policy posture potentially softens, and global risks stabilize, the bullish narrative for gold may fade.
Scenario Analysis: Base, Bull, and Bear Cases
In its base case — given a 60% probability — Citi expects gold to hold above $3,000 in the short term, before trending lower (read: Why Gold ETFs Offer the Best Safe Haven Right Now).
The bull case (20% probability) sees a potential new high in Q3 2025 if fears around tariffs, geopolitical instability, and stagflation intensify. Meanwhile, the bear case (20%) envisions a sharper selloff, driven partly by a swift resolution of tariff disputes.
Current Prices and Market Reactions
As of the latest trading session, spot gold was trading at around $3,381 an ounce, experiencing volatility. This followed Trump’s call for a Tehran evacuation amid the Israel-Iran conflict, and his abrupt departure from a G7 summit.
ETFs in Focus
Against the above-mentioned backdrop, gold-backed exchange-traded funds (ETFs) like SPDR Gold MiniShares Trust (GLDM - Free Report) , iShares Gold Trust (IAU - Free Report) , iShares Gold Trust Micro (IAUM - Free Report) , GraniteShares Gold Trust (BAR - Free Report) and Goldman Sachs Physical Gold ETF (AAAU - Free Report) should be monitored closely.