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Citibank just did a 180 on gold and now forecasts new record highs before the end of the year.

Just six weeks after lowering its forecast and warning that gold could drop below $3,000 before the end of the year, Citibank now projects gold will hit $3,500 an ounce over the next three months. This would put it in range to eclipse the record high hit in April.

Citi also raised its expected gold trading range to $3,300 to $3,600, up from $3,100 to $3,500 previously.

In June, Citi lowered its 6 to 12-month gold price forecast to $2,800 per ounce from $3,000.

Citi analysts remain worried about the impact of tariffs on the global economy and also cited dollar weakness as a reason to be bullish on gold.

“U.S. growth and tariff-related inflation concerns are set to remain elevated during 2H’25, which alongside a weaker dollar, are set to drive gold moderately higher, to new all-time highs.”

The dollar charted its worst start to a year since 1973. In fact, one could argue that it’s not so much that the gold is going up but that the greenback is sagging. Gold is reflecting the devaluation of the U.S. currency.

There also appears to be a developing bear market in bonds. U.S. Treasuries have historically been a go-to safe-haven asset. However, Treasury yields increased as bonds sold off in April at the height of geopolitical uncertainty.

The note pointed out that U.S. import tariffs set in many of the trade deals reached in recent weeks were higher than expected, including taxes levied on major trading partners, including Canada, India, Brazil, and Taiwan.

“The market has been concerned about a U.S. recession due to high interest rates for the past three years, buying gold to hedge the downside risks. This fear has likely only increased over the past six months, given President Trump’s largest-in-a-century trade tariff agenda.”

Citi analysts also cited increasing weakness in the labor market and continued geopolitical risk, particularly relating to the war between Russia and Ukraine. Additionally, they noted declining “institutional credibility” in the U.S. due to President Trump’s incessant pressure on Federal Reserve Chairman Jerome Powell and the recent firing of Bureau of Labor Statistics Commissioner Erika McEntarfer.

Citi notes that gold demand has exploded, rising about 33 percent since 2022. In that time, the price has nearly doubled. Analysts cite strong investment demand, continued central bank gold buying, and a relatively resilient jewelry market despite headwinds created by higher prices.

Gold demand was up about 3 percent in Q2, with Asian investment offtake leading the way.

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