Gold Price Target Raised to $3,500 Amid Tariff Threats and Geopolitical Risks

Citi has raised its short-term gold price target back to $3,500 per ounce, citing rising geopolitical tensions and the renewed threat of U.S. tariffs on the European Union. In its latest note, the bank expects gold to trade in a range between $3,100 and $3,500, revising its previous estimate of $3,000 to $3,300 made earlier this month.

Despite the bullish short-term outlook, Citi remains cautious on gold over the long term. The bank highlights two concerns: potential easing of equity market risks as the U.S. midterm elections approach and the Federal Reserve moves to cut interest rates, and the record-high gold holdings by households—now at the highest levels in 50 years.

The upward revision comes after President Donald Trump threatened a 50% tariff on EU imports, later agreeing to a one-month delay following talks with EU leadership. The announcement added to ongoing global uncertainty, supporting gold’s safe-haven appeal.

Citi first raised its gold forecast to $3,500 in April 2025, a level that was surpassed on April 22 amid concerns about Fed independence. As trade tensions briefly eased, the bank adjusted its view, calling for a consolidation period and lowering its short-term target to $3,150, which was reached on May 15.

Gold remains in high demand, with global spending on the metal reaching 0.5% of world GDP—the highest since the 1970s. Citi attributes this to strong investment inflows during uncertain times and resilient jewelry demand from India and China, even at elevated prices.

Platinum and palladium targets remain unchanged at $1,050 and $900 per ounce, respectively, with Citi citing the need for stronger demand fundamentals and continued hedging activity.