Citing heightened geopolitical risks, physical supply shortages, and renewed uncertainty surrounding the Federal Reserve's independence, Citigroup has upgraded its short-term outlook for precious metals.
Analysts, including Max Layton, wrote in an email that the 0-3 month gold price target has been raised to $5,000 per ounce from $4,200, while the silver price target has been increased to $100 per ounce from $62.
The bank stated, "Investment momentum remains strong, and numerous positive catalysts are likely to persist" into the first quarter.
Due to a potential delay in the US Section 232 tariff decision, the ongoing physical shortages for silver and platinum group metals may worsen slightly in the near term.
The base-case scenario suggests that an easing of geopolitical risks surrounding areas such as Venezuela and Iran would pressure hedging demand later this year, particularly for gold.
The bank's 6-12 month price target for gold is $4,000 per ounce, while the target for silver is $70 per ounce.
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