Citigroup: Gold and silver still have upside potential; improving geopolitical and macroeconomic conditions will revive demand for precious metals investments.

Citigroup Research stated that the uptrend in precious metals is far from over, with silver continuing to track gold’s moves and serving as a more aggressive play on upside due to its higher volatility. Should tensions in the Strait of Hormuz eventually ease, paired with a less hawkish stance from the Federal Reserve, investment demand for precious metals will continue to recover. Recent market action has already laid the groundwork for this outlook. The settlement price of COMEX August gold futures rose 0.49% to $4,383 per ounce; silver futures fell 0.5% on the day to $64.769 per ounce, ending a two-day winning streak. Citigroup noted that the short-term pullback does not alter silver’s status as a high-beta asset relative to gold, adding that if easing geopolitical risks drive capital back into precious metals, silver could rise to $95 per ounce by 2027. However, Citigroup also outlined risk scenarios, estimating there is roughly a 20% chance silver could drop to $50 per ounce, highlighting that current precious metals trading remains highly dependent on interest rate expectations, U.S. dollar movements, and geopolitical risks. For markets, gold remains a core asset for hedging and rate-cut expectations, while silver is better suited to capturing upside from a rebound in risk appetite.