$PAXG Citi lowers short-term gold forecast: risks of the Strait of Hormuz vs long-term optimism
Citigroup has revised its short-term forecast for $XAUT gold, cutting the 3-month target from $4300 to $4000 per ounce. The reason stems from expectations of more complex macro dynamics: prolonged tension in the Strait of Hormuz, which heightens inflationary risks through energy markets, but at the same time may temporarily reduce physical demand for gold.
Bank analysts, including Kenny Hu, point out that demand from the jewelry sector and investors could become the weak link in the short term. If geopolitical tensions persist until the end of summer, prices could theoretically dip down to $3500 per ounce due to a decrease in purchasing activity.
At the same time, Citi emphasizes the classic duality of gold as an asset: it benefits from fears and inflation, but suffers during stabilization. In the event of de-escalation of the conflict, inflationary pressure would ease, along with demand for safe-haven assets.
Despite short-term pessimism, the bank maintains medium- and long-term optimism, keeping the target at $5000 over a 6–12 month horizon. This effectively outlines a scenario of 'pullback before a new growth cycle.'
Citigroup has revised its short-term forecast for $XAUT gold, cutting the 3-month target from $4300 to $4000 per ounce. The reason stems from expectations of more complex macro dynamics: prolonged tension in the Strait of Hormuz, which heightens inflationary risks through energy markets, but at the same time may temporarily reduce physical demand for gold.
Bank analysts, including Kenny Hu, point out that demand from the jewelry sector and investors could become the weak link in the short term. If geopolitical tensions persist until the end of summer, prices could theoretically dip down to $3500 per ounce due to a decrease in purchasing activity.
At the same time, Citi emphasizes the classic duality of gold as an asset: it benefits from fears and inflation, but suffers during stabilization. In the event of de-escalation of the conflict, inflationary pressure would ease, along with demand for safe-haven assets.
Despite short-term pessimism, the bank maintains medium- and long-term optimism, keeping the target at $5000 over a 6–12 month horizon. This effectively outlines a scenario of 'pullback before a new growth cycle.'