Citi and UBS raise their gold targets to $3,000 on tariffs, central bank buying and safe-haven demand

(Kitco News, Thurs. Feb. 6th, 2025) – Banking giants Citigroup and UBS both raised their gold price forecasts on Thursday, the latest financial firms to update their 2025 bullion targets amid surging safe-haven demand driven by President Trump’s disruptive domestic and foreign policy proposals.

“The gold bull market looks set to continue under Trump 2.0 with trade wars and geopolitical tensions reinforcing the reserve diversification/de-dollarization trend and supporting emerging market (EM) official sector gold demand,” Citi analysts wrote in a note.

Citi now expects gold prices to hit $3,000 per ounce in the next three months as geopolitical tensions and trade wars boost demand for safe-haven assets, up from $2,800 an ounce, which the precious metal surpassed last week. They also raised their average price target for 2025 to $2,900 an ounce, while leaving their 6-12 month price target of $3,000 unchanged.

The bank added that the strengthening U.S. dollar increases the incentive for central banks to boost gold holdings to help support their own currencies, while investors are likely to purchase both physical gold and exchange-traded funds.

Citi also directly addressed the potential impact of Trump’s tariffs on precious metals, with analysts saying Wednesday’s U.S. price premiums implied a roughly 20% chance that gold would be included in a 10% blanket global tariff.

Citi does not foresee gold being included in any blanket tariffs in the second quarter of 2025, as it is considered a financial asset and, in the case of US gold coins, legal tender. However, they acknowledge the risk of a spike in US premiums if initial communications about potential broad tariffs do not explicitly exempt gold, or if it is indeed subjected to such tariffs.

The analysts said that the 20% probability of tariffs on the yellow metal is still significantly lower than the implied probabilities for other metals like copper, silver, and platinum.

“A Russia/Ukraine peace deal, and confirmation of whether gold would be exempt from broad tariffs (or not), could provide a buying opportunity over the next 2-3 months,” they said.

Swiss bank UBS also raised its 12-month gold forecast to $3,000 per ounce on Thursday, as the spot price has already overshot its prior prediction of $2,850 per ounce.