Citi: Half of Gold's Rally Risk May Ebb Later This Year

Citigroup said Friday, January 31, that gold investment allocations are supported by intertwined geopolitical and economic risks—but roughly half of these risks may dissipate later this year. The bank noted some core risk factors underpinning gold demand—including U.S. government debt concerns and AI uncertainty—could keep gold prices elevated above historical averages. However, Citigroup estimates most risks currently priced into gold will not materialize by 2026, or if they do, will not persist beyond that year. It added: "We expect the Trump administration to pursue 'American-style gold stability' ahead of the 2026 midterm elections, alongside an end to the Russia-Ukraine conflict and eventual easing of the Iran situation—all signaling lower relative risk than current levels. If Powell’s nomination is confirmed, this will further validate our long-held view that the Fed will maintain its political independence, a separate mid-term headwind for gold prices." (Oriental Wealth)