Gold prices could fall below $3,000 an ounce
Citigroup has just released a remarkable report when it lowered its gold price forecast, warning that gold prices could fall below $3,000/ounce by the end of 2025, 16% lower than the current price of $3,369/ounce as of the end of June 20.
Specifically, the bank adjusted its 0-3 month gold price target from $3,500/ounce to $3,300/ounce and its 6-12 month forecast from $3,000 to $2,800/ounce, citing the decline in gold's appeal as a safe-haven asset as global economic conditions improve by 2026.
Citi believes that economic stability, especially in the US, will reduce investment demand for gold. Analysts predict that the Federal Reserve will cut interest rates, boosting economic growth, thereby reducing inflationary pressures. In addition, the return of political stability in the US, especially in the context of midterm elections, is also considered a factor reducing the attractiveness of gold.
In Citi’s bearish scenario, gold prices could fall further if geopolitical tensions ease and the global trade war is resolved, but Citi only rates the likelihood of this scenario occurring at 20%.
Despite its bearish outlook on gold, Citi is bullish on silver, forecasting prices to hit $40 an ounce in the next 6-12 months, and even hit $46 an ounce in a bull case, thanks to tight supply and strong demand.
In contrast to Citi, Société Générale (SocGen) and many large financial institutions such as Goldman Sachs remain bullish on gold.
SocGen sees the asset as both a strong growth driver and a hedge against geopolitical uncertainty. The French bank said it was in no rush to take profits as gold prices remained below its target of $4,000 an ounce, even predicting prices could reach $4,200 by the second quarter of 2026.
Factors supporting SocGen’s bullish view include a weakening US dollar, strong gold purchases by central banks to diversify reserves and reduce their dependence on the US dollar, and the possibility of future Fed rate cuts. SocGen expects gold prices to consolidate around $3,450/oz over the summer before accelerating in Q4 2025 and the first half of 2026.
Institutions such as Goldman Sachs have also highlighted gold’s role as an inflation hedge, especially when the US dollar is weak and real interest rates are falling. Physical demand for gold from emerging markets, especially China and India, is also an important driver of gold prices.
Profit taking activities and cash flow trends
After two years of impressive gains, gold is facing the question of whether it is time for investors to take profits. At prices currently around $3,370 an ounce, gold has become one of the best performing assets in an investment portfolio.
However, when gold prices are at historic highs, the possibility of money shifting to other assets such as stocks, bonds, silver, or even cryptocurrencies... is increasingly evident.
US stocks, especially indices like the S&P 500, could benefit from a less gloomy economic outlook. If the US does indeed emerge from recession and return to rapid growth as Citi forecasts, investors could shift away from gold and into technology stocks or growth companies. US bonds would also attract attention as inflation is expected to stabilize.
The US economic outlook plays a key role in shaping gold prices. If the Fed cuts interest rates as expected, the opportunity cost of holding gold will decrease, allowing gold prices to remain high.
Conversely, if the US economy grows strongly and inflation is kept under control, gold could lose its appeal as a safe haven. Recent data shows that US inflation has fallen faster than expected, while the prospect of avoiding recession is becoming clearer. This supports Citi's view that gold prices are likely to fall.
Geopolitically, Israel-Iran tensions are in the spotlight. Attacks on hospitals in Israel and Iranian nuclear facilities have escalated the conflict, but both sides appear to be holding back from a full-blown war. Iran has refrained from using its proxies like Hezbollah and the Houthis, while the US has increased its military presence but prioritized pressuring Iran to return to nuclear negotiations.
If the Middle East conflict cools down, the reduced demand for gold as a safe-haven asset could push the price below $3,000 an ounce as forecast by Citi.
Domestically, the price of gold bars and gold rings remains high. Specifically, by the end of the trading session on June 20, the price of 9999 gold bars at SJC and Doji was listed at 117.4-119.4 million VND/tael (buy - sell). SJC announced the price of gold rings of type 1-5 at only 113.5-116 million VND/tael (buy - sell). Doji announced the price of gold rings of type 1-5 at only 114-116 million VND/tael (buy - sell).
Source: https://vietnamnet.vn/vi-sao-gia-vang-the-gioi-duoc-du-bao-giam-manh-ve-moc-96-trieu-dong-luong-2413509.html
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