Gold Price Forecast: XAU/USD to drift lower towards $1,750 in the medium-term – Citibank

Geopolitical uncertainty support short-term upswing in gold price. Nonetheless, the gold market rally is expected to reverse, in the view of economists at Citibank.

Geopolitical tensions and elevated volatility to support gold in the short-term

“We upgraded the 0-3m gold point-price target $125/oz to $1,950/oz but remain bearish spot/forwards with a 6-12m downside target of $1,750.”

“Even though gold trading tends to weaken into Fed lift-off, we think geopolitical tensions and elevated asset market volatility can support the yellow metal in the short-term.”

“Over the medium-term, higher real yields and stronger equities can weigh on bullion prices again, while risk premiums should erode. But robust physical demand in Asia and recession tail hedges might mute the extent of price downside in 2022.”

“If bullion markets stay strong into April, it might point to a new bullish price cycle, and it would need to re-think our gold/rates thesis.”