Citigroup Turns Bearish on Gold: Expected to Drop to $4,300 per Ounce Within Three Months

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　　Another major investment bank has lowered its outlook for gold prices.

　　Recently, Citi publicly stated its short-term bearish view on gold and predicts that gold prices will reach $4,300 per ounce in the next zero to three months.

　　This is already the fourth major international investment bank to change its stance on gold and, so far, is taking the most aggressive “price cut.”

　　

　　Citi’s concerns are based in reality: If the US and Iran successfully finalize a cooperation consensus and shipping order in the Strait of Hormuz is fully restored, international oil prices may return to pre-conflict levels. At that point, inflation sentiment in the market will weaken rapidly. If the pace of nominal interest rate cuts lags behind the decline in inflation, real interest rates will rise in turn, putting downward pressure on gold prices. Citi’s 0-3 month gold price target is $4,300 per ounce, and if a major risk-aversion event occurs, gold prices may fall far below this level.

　　This year, after peaking at $5,598.75 per ounce (UTC+8) at the end of January, gold has fallen into a lengthy correction. Although there have been some rebounds during this period, the overall trend is downward.

　　As gold entered a correction, institutions started to lower their gold price forecasts. Just prior to Citi’s downgrade, JP Morgan also reduced its 2026 average gold price forecast from $5,708 per ounce to $5,243, citing “dripping” investor interest and weakening short-term demand for gold.

　　Analysts at JP Morgan said in a report released Sunday: “This calm is reflected in stagnant trading activity and demand indicators. COMEX total open interest and traded volumes remain subdued, managed fund futures net positions are hovering at low levels, and ETF inflows are also quiet.”

　　Morgan Stanley was the first major bank to cut its forecast, lowering its 2026 H2 gold price target to $5,200 per ounce at the end of April—well below the previous expectation of $5,700, a significant downgrade.

　　Morgan Stanley’s rationale: Geopolitical frictions have pushed real interest rates higher, delayed Federal Reserve rate cuts, and fundamentally changed the macroeconomic framework. Gold typically strengthens in a falling interest rate environment, but the currently elevated rates have broken the traditional price logic, prompting investors to readjust their positions. The situation has reversed: high real rates make bonds more attractive, and the zero-yielding gold becomes significantly less appealing. Morgan Stanley stresses this has returned gold’s classic negative correlation with real rates to normal—during the surge in gold prices from 2025 to early 2026, this correlation had weakened substantially, but is now back at a high level.

　　Meanwhile, operations by central banks in various countries have also put pressure on gold prices. Central banks in emerging markets such as Turkey have started selling gold reserves, adding to the price pressure. In addition, outflows from gold ETFs and rapid exits by earlier heavy buyers have accelerated gold’s price decline.

　　Subsequently, ANZ also cut its year-end gold target from $5,800 to $5,600 per ounce and postponed its forecast for gold reaching $6,000 from early 2027 to mid-2027.

　　ANZ analysts pointed out: “The market currently seems to be caught in a dilemma—on the one hand, anxieties fueled by geopolitics, and on the other, concerns over rising inflation.” At the same time, physical gold demand may also face risks as India’s Prime Minister has called on citizens to temporarily suspend gold purchases for a year to help safeguard the country’s forex reserves.

　　

　　However, even though near-term outlooks are bearish, more major banks believe the bull case for gold remains unchanged, and that the probability of gold price increases in the mid-to-long term remains high. 

　　Goldman Sachs continues to hold its bullish view on gold and predicts that gold will resume its rally by the end of 2026.

　　Analysts Lina Thomas and Daan Struyven noted in their report that the medium-term outlook for gold remains solid. With ongoing central bank purchases and two expected Federal Reserve rate cuts this year in the US, gold prices could reach $5,400 per ounce.

　　Wells Fargo has made a bold prediction of $8,000 per ounce, based primarily on currency depreciation. Wells Fargo pointed out that the global economy has entered the fourth “currency depreciation cycle,” in which rising debt, deficits, and inflation are eroding the value of the US dollar and other fiat currencies. In such times, investors often seek refuge outside the traditional system; and historically, gold has always been the best place to preserve wealth.

　　Canadian mining legend Pierre Lassonde predicts that, as gold replaces the US dollar as the ultimate reserve currency, gold prices could hit $17,250 per ounce. Lassonde is the former president of Newmont Mining.

　　Lassonde stated that the current extreme leverage makes this economic cycle more volatile. In the late 1970s, gold prices increased tenfold as both inflation and interest rates surged. Now, the scale of US sovereign debt must also be considered.

　　As of early May 2026, total US national debt approached $39 trillion. Rising borrowing costs have aggravated the debt burden, and according to the Congressional Budget Office, net interest payments will account for nearly 14% of total federal spending in the current fiscal year.

　　Lassonde believes the Federal Reserve is monetizing the debt, creating ongoing tailwinds for gold. He’s convinced that the $17,250 per ounce target is not a fantasy, and the market will see this within three years.

　　UBS Singapore-based metals strategist Joni Teves also noted that institutions remain firmly bullish on gold. She recently said: “We expect gold prices to rebound from current levels and set new highs again this year.”

　　UBS currently has a gold price target of $5,600 per ounce, and sees potential for $6,000, an upward revision from its initial $5,400 target at the start of 2025.

　　Regardless of gold’s future trajectory, this bull run has already presented many corporate opportunities.

　　According to Cailian Press, SF Holdings plans to open a gold warehouse in Hong Kong to cater to storage demand as Hong Kong forges ahead with its precious metals hub development initiative. 

Editor: Zhu Henan