Citi Calls Time on Gold’s Rally Due to Slumping Demand, Fed Cuts

Gold is expected to sink back below $3,000 an ounce in the coming quarters as a record-setting rally runs out of steam, according to Citigroup Inc., calling time on one of the standout rallies in commodities.

“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, they said.

Bullion has soared 30% this year, last setting a record in April, as US President Donald Trump’s disruptive trade policies and the crisis in the spurred haven demand. The precious metal’s ascent has also been underpinned by concerns about the US deficit and assets, as well as by consistent buying by central banks as they sought to diversify reserves.

“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.

In the bank’s base case — which carried a 60% probability — gold was expected to consolidate above $3,000 an ounce over the next quarter, then head lower. Spot bullion was last at about $3,396.

In outlooks for other metals, Citi said it was very bullish on both aluminum and copper . The lightweight metal “is highly leveraged to an uptick in global growth and sentiment,” the analysts said.