Citigroup has revised its three-month gold price target down to $4,000 per ounce from a previous $4,300 per ounce. This adjustment stems from the persistent tensions in the Strait of Hormuz and elevated energy prices, which have heightened market expectations for a Federal Reserve interest rate hike this year.
Analysts, including Kenny Hu, noted in a report on Monday that weak physical demand could exert further downward pressure on prices.
These analysts pointed out that if the Strait of Hormuz remains closed through the end of summer, reduced gold purchases could potentially drive the price back to around $3,500 per ounce.
"Consequently, short-term risks appear skewed to the downside, and bargain hunting would only be prudent with confidence that the situation will not escalate further," they stated.
Citigroup has kept its 6-to-12-month gold price target unchanged at $5,000 per ounce.
"Over the longer term, we remain constructive on gold. However, we believe the risks for short-term gold investments are exceptionally high for investors without wide stop-losses and with shorter investment horizons," the analysts wrote.
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