Citi: Tariffs remain a headwind for India's gold imports in the second half of the year; maintains 0-3 month gold price target of $4,800 per ounce.

Citi said in a research note that it expects India's gold imports in 2026 to remain below 2025 levels even with stronger seasonal demand from September to November, reflecting high import tariffs, increased recycling volumes, and persistently elevated gold prices. The bank maintained its 0-3 month gold price target at $4,800 per ounce. The bank expects the Strait of Hormuz situation to be resolved in the fourth quarter of 2026, along with tariff increases being reversed in the first quarter of 2027, which would drive a rebound in gold imports in 2027. With crude oil prices staying above $100 per barrel, pressure on foreign exchange reserves and the current account may persist. Therefore, the bank believes the policy response is more likely to involve gold monetization measures rather than stricter import restrictions. Weak physical import demand from India and other emerging markets, combined with limited participation in China's retail market, weighed on gold prices in September. By the fourth quarter of 2026, the bank expects major bullish macroeconomic or geopolitical catalysts, such as de-escalation in U.S.-Iran tensions or a shift toward a less hawkish Fed stance, to attract new investor buying and push gold prices above the current spot level of $4,350 per ounce.