Citi raised the short-term target price for gold to $3,500 per ounce, with tariff upgrades being a key factor.

Citibank has announced in its latest report that it has raised the target price for gold for the 0-3 month period to $3500 per ounce, and it expects the gold price to consolidate between $3100 per ounce and $3500 per ounce. This adjustment is mainly based on several key factors:
1. The escalation of tariffs triggers market risk aversion.
Citigroup pointed out that the new tariff escalation is one of the main reasons for the upward adjustment of the gold price target. As global trade tensions escalate, particularly the tariff conflict between the United States and the European Union, market risk aversion sentiment has significantly increased, and investors are seeking gold as a safe-haven asset.
2. Geopolitical Risks
In addition to tariff issues, geopolitical risks have also had a significant impact on gold prices. The increasing uncertainty in the current international situation has further enhanced gold's appeal as a safe-haven asset.
3. The gold purchasing behavior of Chinese insurance companies
Citigroup also mentioned that Chinese insurance companies have recently been allowed to allocate 1% of their total assets to gold, a policy that is expected to generate an annual demand of about 255 tons, equivalent to a quarter of the total purchases by central banks worldwide. This additional demand will provide strong support for gold prices.
4. Strong Demand in the Gold Market
Currently, global demand for gold is strong, with approximately 0.5% of the world's GDP spent on purchasing gold, the highest level in half a century. This strong demand not only reflects the market's risk-averse sentiment but also indicates that gold's appeal as a safe-haven asset is continuously increasing.
Market Response and Future Outlook
Citigroup's prediction has attracted widespread attention in the market. Although gold prices may consolidate between $3100 and $3500 per ounce in the short term, Citigroup holds a cautious view on the long-term outlook for gold. The bank anticipates that as the U.S. midterm elections approach and the Federal Reserve cuts interest rates, market risk appetite may change, thereby putting some pressure on gold prices.
However, the market sentiment in the short term still provides strong support for gold prices. Especially in the context of increasing global economic uncertainty, the importance of gold as a safe-haven asset will be further highlighted.