Gold rally over? Citi: Demand decline and Fed rate cut in sync, gold price to fall below $3000.

According to Citigroup, due to the record-breaking rally gradually fading, the gold price is expected to fall below $3000 per ounce in the next few quarters. Analysts, including Max Layton, stated in a report: "Our research shows that by the second half of 2026, the price of gold will fall to $2500 to $2700 per ounce." They said that the decline in gold price could be due to weakening investment demand, improving global economic growth prospects, and the Fed's interest rate cuts. Gold prices have already risen by 30% this year, hitting a historical high in April. The continuous rise in gold prices was stimulated by the destructive trade policies of US President Trump and crises in the Middle East which fueled safe-haven demand. In addition, concerns about the US fiscal deficit and assets, as well as continued purchases by major central banks to diversify reserves, have also supported the rise in gold prices. Citigroup analysts said, "We expect that by the end of 2025 and 2026, investment demand for gold will decrease as we begin to see the 'bearish effects' of Trump's popularity and US economic growth, especially as the US midterm elections approach." They also stated, "We expect the Fed to have ample room to shift from a tightening policy to a neutral policy." In the base scenario set by the bank (with a probability of 60%), it is expected that the price of gold will remain above $3000 per ounce in the next quarter, followed by a decline. The current spot price of gold is around $3396. In terms of outlook for other metals, Citigroup is extremely optimistic about aluminum and copper. Analysts said that these lightweight metals are "highly correlated with the warming global economic sentiment."