After the intense battle between bulls and bears, with a 3% massive earthquake in gold, Citi warns that the price of gold may drop to $3800.

After progress was made in the US-China trade negotiations, weakening the demand for safe-haven assets, gold continued to fall on Monday. Spot gold dropped by 3.2%, falling below $4000 per ounce for the first time since October 10th. At the same time, US Treasury bonds also fell - despite market expectations of further monetary policy easing by the Federal Reserve this week, rising bond yields have weakened the attractiveness of gold as a non-interest bearing asset. However, gold saw a slight recovery on Tuesday. As of the time of writing, spot gold rose by 0.57% to $4004.26 per ounce. Although gold has significantly retreated from its record high of $4380 per ounce earlier, the price of gold has still risen by over 50% so far this year. Central banks continuing to buy gold and so-called "currency debasement trades" (investors selling sovereign bonds and currencies to avoid risks from expanding fiscal deficits) have supported the price of gold and attracted a large number of retail investors. Chris Weston, research director at Pepperstone Group, stated in a report, "Although gold is still making lower lows and futures volume remains high on down days, it is not easy to pick the bottom at this time." "The wiser approach now is to let others attempt the difficult task first, and then tactically buy on the rebound after prices bottom out." The recent sharp rise and fall of gold has become a hot topic at the London Bullion Market Association (LBMA) Precious Metals Conference held in Kyoto this week. Market strategist John Reade from the World Gold Council stated at the conference that central banks are buying gold less aggressively than before, and a more significant adjustment may be welcomed by professional traders. The LBMA conference is the most important annual gathering in the global precious metals industry. Analysts from Citigroup, including Max Layton, pointed out in a report released on Monday that factors such as the restart of cooperation between the US and China, weakening upward momentum in gold prices, and the potential end of the US government shutdown could push gold prices further lower in the coming days or weeks. Citigroup expects the price of gold to drop to $3800 per ounce in the next three months. The market is currently widely expecting the Federal Reserve to cut interest rates by another 25 basis points at this week's policy meeting. This will be the Fed's second consecutive rate cut. At the same time, the market is also watching the five final candidates to succeed Federal Reserve Chairman Powell. US Treasury Secretary Benson confirmed on Monday the five final candidates for Powell's successor. Benson revealed that the candidate pool has been narrowed down to five individuals, including current Federal Reserve Board members Christopher Waller and Michelle Bowman, former Fed Governor Kevin Warsh, White House National Economic Council Director Kevin Hassett, and BlackRock executive Rick Rieder. Benson, who is leading the selection process, reiterated that he plans to conduct a new round of interviews and expects to submit a "high-quality candidate list" to President Trump after the Thanksgiving holiday. Trump himself has stated that he expects to finalize the nomination by the end of this year.