The bull market continues! Wall Street strongly bullish on gold breaking 3000

Citi: Target $3000

Raised the gold target price for 0-3 months to $3000/ounce, maintaining the 6-12 month target price at $3000/ounce, and increased the average price forecast for 2025 from $2800/ounce to $2900/ounce.

The gold bull market is based on strong physical fundamentals and will continue into the Trump 2.0 era. Citi's gold pricing framework shows that investment demand accounted for 82% of gold mine supply in the fourth quarter of 2024, and it is expected that by the fourth quarter of 2025, gold investment demand will rise to over 95% of mine supply, which will support gold prices at historical highs. Private investment demand will increase in the coming months through gold bars, coins, ETFs, OTC, and other investments.

As actual and perceived growth risks rise (including trade wars, high interest rates, continued deterioration of the U.S. labor market, risks of non-U.S. currency depreciation, and risks of U.S. stock market declines), the demand for gold as a hedging tool will continue to increase.

Trade wars and geopolitical tensions have intensified the trend of reserve diversification/de-dollarization, supporting gold demand from the official sector in emerging markets. It is expected that gold will not be included in any tariff package in the second quarter of 2025 (as gold is a financial asset and monetary metal/U.S. coins are technically legal tender, thus imposing tariffs on legal tender is unreasonable).

HSBC: Watch for Consolidation

Boosted by moderate employment data, gold prices reached new highs; however, after repeated increases, higher yields and a strong dollar may lead to a consolidation in gold prices.

The uncertainty of tariffs provides potential support for gold; China reported higher gold holdings and launched a pilot purchasing program for insurance companies.

Silver and platinum group metals (PGMs) weakened, which may indicate an overbought condition in the precious metals market; industrial demand is slowing.

Goldman Sachs: Bearish in the Short Term, Bullish in the Long Term

If tariff uncertainties dissipate and positions normalize, gold prices are expected to moderately decline in the short term. However, ongoing central bank purchases and gradually increasing ETF holdings as federal funds rates decline will continue to support Goldman Sachs' forecast of gold prices reaching $3000 per ounce by the second quarter of 2026.

U.S. policy uncertainty continues to boost central bank and investor hedging demand, which may pose a risk of gold prices rising above the $3000 per ounce target Despite the high level of positions reducing the attractiveness of the current entry point (for short-term investors), Goldman Sachs maintains its long-term bullish trading recommendation on gold (for long-term investors and those seeking to hedge against the tail risks of U.S. policies).

Concerns that the U.S. will impose a 10% tariff on gold have also increased the exchange for physical delivery price (EFP) — the gap between New York Commodity Exchange (COMEX) futures and London spot gold prices — as tariffs would complicate cross-market arbitrage, and prompt traders to ship gold to the U.S.

If the tariffs take effect, a large amount of short covering related to EFP trading on COMEX could temporarily further widen the EFP, potentially reaching nearly 10%, before ultimately stabilizing at a lower level within the 0-10% range, depending on the supply and demand dynamics between the London and U.S. markets.

JP Morgan: Year-end target 2950

Bearish sentiment from stocks may put pressure on gold in the short term, but destructive tariffs continue to fuel a mid-term bull market for gold. If the current tariffs persist, the risk of gold prices reaching JP Morgan's year-end target of $2950 per ounce is skewed towards happening faster than currently expected.

UBS: Upgraded target price

UBS has raised its gold forecast for the next 12 months to $3000 per ounce.

Gold remains an effective portfolio hedge and diversification tool, allocating about 5% of gold in a dollar-balanced portfolio is optimal.

Gold-related stocks (such as gold miners) may offer greater capital gain potential, but they may also be more volatile, performing similarly to stocks during risk-averse periods. Gold and its investment methods (direct or indirect) should form part of a diversified portfolio.

Author of this article: Zhibao Mikko, Source: Zhibao Wisburg, Original title: "Various Institutions Strongly Bullish on Gold Breaking 3000"

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