Citi analysts predict that gold prices will drop below $3,000 per ounce after the third quarter of 2025. They attribute this forecast to weaker demand and growing optimism about economic growth. As consumer confidence and economic performance improve globally, gold faces pressure.
The precious metal is often seen as a safe-haven asset during times of economic uncertainty. Lower demand for gold as an investment is expected as investors shift towards higher-yielding assets in a more robust economic environment. U.S. retail sales dropped more than expected in May.
A decline in motor vehicle purchases weighed down this. However, overall consumer spending remains supported by solid wage growth. This indicates a resilient economic landscape.
UBS has also cautioned investors about the future of gold.
Gold prices face future pressures
The commodity has been a stellar performer over the past three years but is now struggling to maintain its upward momentum.
Gold has shown an impressive 108% increase since late 2022 and a 45% rise over the past 12 months, trading around $3,394 per ounce. However, after peaking at $3,433 per ounce in April, gold has faced challenges in sustaining these high levels. Citi’s analysts believe that gold’s investment demand will dwindle later this year into 2026.
In the short term, trade deals with major global economies, along with the recent passing of the Big Beautiful Bill, should bolster market sentiment and prevent gold from rising significantly further. However, they foresee a potential shift in Federal Reserve policies, which could lead to rates being cut from restrictive to neutral, further supporting global growth and impacting gold prices. Citi recommends that gold miners capitalize on the current high prices to hedge against potential declines below $3,600-$3,700 per ounce.
They predict that gold will consolidate between $3,100 and $3,500 per ounce over the next quarter. Looking further ahead, Citi’s research suggests that the gold market might have already witnessed its peak. They anticipate that a gold deficit will likely peak in the third quarter of this year, which will fundamentally weaken the market due to reduced investment demand.
By the second half of 2026, gold prices are expected to settle between $2,500 and $2,700 per ounce.