Commodity Roundup: Citi projects gold to hit $3,000/oz amid geopolitical heat

Gold prices (XAUUSD:CUR) eased slightly on Tuesday, hitting pause after a blistering rally fuelled by increased geopolitical uncertainty and central-bank buying, as traders assess the return of a higher-for-longer narrative on U.S. rate.

Gold prices clocked another record-high settlement on Monday, with the most-active June contract for gold futures trading 0.37% higher to settle at $2,383 per ounce, with some analysts expecting prices to go even higher.

Citi expects gold prices to hit $3,000/oz over the next 6–18 months. The financial gold price floor has also moved higher from around $1,000 to $2,000 per ounce, Citi said.

“The recent gold rally has been aided by geopolitical heat and is coinciding with record equity index levels,” according to the bank.

Some other Wall Street banks, including Goldman Sachs, have raised their price forecasts for gold. GS lifted its year-end forecast to $2,700/oz, helped by interest rate cuts expected later this year from the U.S. Federal Reserve.

Markets are, however, pricing in less than two rate cuts this year, with the starting point for the easing cycle is now September, pushed back from June, which was pushed back from March, due to hotter-than-expected inflation print.

Among other metals, prices of palladium, silver and some base metals also ticked lower. Market participants also took note of China’s GDP handily beating estimates, but weakness in March data kept investors worried about the country’s economic recovery.

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