Citigroup: Half of the Risks Supporting Gold May Fade Later This Year

Odaily News Citigroup said on Friday that gold investment allocations are supported by a series of intertwined geopolitical and economic risks, but about half of these risks may fade later this year.

Citibank stated that some of the core risk factors supporting gold demand—including concerns over U.S. government debt and AI uncertainty—could all contribute to keeping gold prices at levels higher than historical averages.

However, the bank estimates that most of the risks currently priced into gold will not truly materialize by 2026, or even if they do, they will not be able to sustain beyond 2026. The bank added: "We see the Trump administration striving to achieve 'American-style gold stability' during the 2026 midterm elections. We also see the Russia-Ukraine conflict coming to an end, and the situation in Iran will ultimately ease as well. All of these will imply a reduction in risk relative to current levels. If Wash's nomination is approved, it will further confirm our long-held view that the Federal Reserve still maintains its political independence. This view, in turn, is another medium-term negative factor affecting gold prices." (Jin10)