Citi Lifts Gold Price Forecast to $3,500 Amid Weaker U.S. Outlook and Tariff Concerns

Citi raised its three-month gold price forecast to $3,500 per ounce from $3,300, projecting a trading range of $3,300–$3,600, citing a deteriorating U.S. growth and inflation outlook. The bank expects U.S. tariff-related inflation pressures, slower economic growth, and a weaker dollar to push gold to fresh all-time highs in the second half of 2025.

President Donald Trump’s recent steep tariffs on exports from countries including Canada, Brazil, India, and Taiwan are expected to remain in place, according to U.S. Trade Representative Jamieson Greer. The measures have fueled inflation concerns and heightened safe-haven demand.

The U.S. dollar weakened last week after July nonfarm payrolls rose by just 73,000, following a downwardly revised 14,000 increase in June. The soft labor data has boosted expectations of a Federal Reserve rate cut in September, with markets pricing in an 81% probability, according to the CME FedWatch tool.

Citi also pointed to second-quarter labor market weakness, rising doubts over Federal Reserve credibility, and elevated geopolitical risks from the Russia-Ukraine conflict as additional gold price drivers. Gold, a traditional safe-haven asset, benefits from low interest rates and economic uncertainty.

The bank estimates global gold demand has surged over one-third since mid-2022, nearly doubling prices by Q2 2025. This demand growth is fueled by robust investment inflows, steady central bank purchases, and resilient jewelry demand despite record-high prices.

As of 0340 GMT Monday, spot gold traded at $3,356.88 per ounce, reflecting strong investor interest and positioning for further gains in the months ahead.