The gold price is predicted to reverse soon after a record-breaking rally. According to Citibank, gold is expected to fall below $3,000 per ounce in the coming quarters, reports Bloomberg.
Citi Research believes gold prices may have reached their peak, with prices anticipated to fall in the third quarter of 2025. Citi says its most likely case for gold is that prices consolidate around the $3,100 to $3,500 per troy ounce range in 3Q, before easing further through the remainder of the year and into 2026.
“Our work suggests that gold returns to about $2,500 to $2,700 an ounce by the second half of 2026,” analysts, including Max Layton said in a report. The slump may be driven by weaker investment demand, improving global growth prospects, and rate cuts by the Federal Reserve, analysts suggested.
Gold price is up 45% over the last year and about 30% so far in 2025. On April 22, gold prices reached an all-time high of $3,500.
Gold is trading at $3,400, a one-month high, but there aren’t many takers at these prices while the potential Israel-Iran talks to resolve Mideast tensions continue.
US President Donald Trump’s disruptive trade policies, as well as the Middle East problems, have boosted gold demand in 2025. Concerns about the US deficit and assets, as well as regular purchases by central banks looking to diversify holdings, have all contributed to the precious metal’s climb.
“We see investment demand for gold abating in late 2025 and 2026, as ultimately, we see the President Trump popularity and US growth ‘put’ kicking in, especially as the US mid-terms come into focus,” they said, referring to US elections due in the middle of Trump’s term. Further, “we see a lot of scope for the Fed to cut from restrictive policy to neutral,” they said.
Gold is just 3% away from crossing the lifetime high price, but is facing huge pressure at these levels. If the Israel-Iran talks fail to ease tensions, a rally in gold could be seen; else the yellow metal could see more downside. Citi also believes that unexpected resolutions to continuing global issues and sources of uncertainty could drive gold prices lower sooner than expected.
In the Citibank’s base case, which had a 60% probability, gold was predicted to consolidate above $3,000 per ounce over the next quarter before falling further.
The gold rate today in India is Rs 98,990 for 10 grams of 24-carat gold. Going forward, the gold price will most likely be dictated by how Middle Eastern tensions develop. Any escalation of Middle Eastern tensions or further deterioration in trade discussions may provide additional support to gold prices. In contrast, a resolution of diplomatic tensions or clarity on trade policy might decrease some of the market’s present safe-haven appetite.
Also Read: Why is gold not in panic mode yet amid the Israel-Iran war?