Citi raises gold forecasts on tariff uncertainty, central bank demand

(Reuters) - Citi Research has raised its near-term and 2025 average gold price forecasts, citing trade wars and geopolitical risks under U.S. President Donald Trump, along with robust central bank purchases.

The bank upgraded its three month price target to $3,000 per ounce from $2,800 and hiked its 2025 average forecast to $2,900 per ounce from $2,800.

"The gold bull market looks set to continue under Trump 2.0 with trade wars and geopolitical tensions reinforcing the reserve diversification or de-dollarization trend and supporting emerging markets official sector gold demand," Citi said in a note on Thursday.

Trump on Tuesday imposed an additional 10% tariff across all Chinese imports into the U.S. and China slapped tariffs on U.S. imports in a swift response, renewing a trade war between the world's top two economies. However, Trump on Monday suspended his threat of 25% tariffs on Mexico and Canada at the last minute.

Spot gold hit a record high of $2,882.16 on Wednesday, boosted by uncertainty over Trump's tariff policies. [GOL/]

The bank said that despite the record pace of global gold reserve buying over the past few years, "we still expect official sector gold demand to stay robust at above Ikt (1,000 tons) per year over 2025-2026".

Global gold demand, including over-the-counter trading, rose by 1% to a record high in 2024, the World Gold Council (WGC) said on Wednesday, adding that central banks sped up buying in the fourth quarter.

Meanwhile, in its base case, Citi does not expect gold to be included in any blanket tariff during second quarter of 2025.

"Gold trading (COMEX vs loco London) implies a 20% chance of Trump including gold in a 10% blanket tariff on all U.S. imports as of Feb 5, lower than the 50-60% implied probability for copper, silver and platinum," the bank added, referring to U.S. and UK gold markets.[MET/L]

Gold stocks in COMEX-approved warehouses have jumped as market players sought deliveries to hedge against the possibility of import tariffs.

(Reporting by Anushree Mukherjee and Ashitha Shivaprasad in Bengaluru; Editing by Mark Potter)

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