After a historic rally that pushed gold to an all-time high of $3,500 per ounce in April 2025, analysts at Citibank are now predicting a notable pullback in the quarters ahead. In a report published by Bloomberg, Citi Research said that gold prices may have already peaked, and a retreat back toward $2,500 to $2,700 per ounce could occur by the second half of 2026.
The forecast signals a potential 25% decline from current levels, marking a sharp reversal in sentiment for one of the best-performing assets of the year.
Gold’s Meteoric Rise May Be Nearing Exhaustion
Gold has gained approximately 45% over the past year, with a 30% rise in 2025 alone, driven by heightened geopolitical tensions, uncertainty over U.S. fiscal stability, and sustained buying from central banks. The April peak at $3,500 came amid soaring safe-haven demand following escalations in the Middle East, controversial trade stances from U.S. President Donald Trump, and persistent concerns about the long-term trajectory of the U.S. economy.
Yet Citi’s analysts, including Max Layton, caution that the rally may now be running out of steam.
“Our work suggests that gold returns to about $2,500 to $2,700 an ounce by the second half of 2026,” Citi said in the report, noting that weaker investment demand, improving global economic growth, and expected interest rate cuts by the Federal Reserve could weigh heavily on the yellow metal.
Base Case: Consolidation Before the Drop
In Citi’s base-case scenario, which carries a 60% probability, gold is expected to consolidate between $3,100 and $3,500 per ounce during Q3 2025, before trending lower through the end of the year and into 2026. According to the bank, the precious metal may continue to find support at elevated levels for a short time, especially if Middle East tensions remain unresolved or escalate further.
But if geopolitical pressures ease and market risk appetite returns, gold could face broad selling pressure, especially from institutional investors and ETFs that had flocked to the asset during periods of uncertainty.
Fed Pivot and US Elections Could Shift the Landscape
Citi also ties its bearish outlook to a changing macro environment in the U.S., particularly as 2026 midterm elections approach. Analysts believe that increasing optimism around U.S. economic growth—referred to as the “Trump growth put”—could reduce gold’s appeal.
“We see investment demand for gold abating in late 2025 and 2026, as ultimately, we see the President Trump popularity and U.S. growth ‘put’ kicking in, especially as the U.S. mid-terms come into focus,” the report said.
Moreover, expectations for the Federal Reserve to shift from restrictive to neutral monetary policy could further suppress gold. As rates fall, the pressure on the U.S. dollar may ease, and gold’s relative attractiveness as a non-yielding asset may diminish.
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