Citi analysts see gold soaring to $3,000, oil at $100 by 2025

AFRICAN STOCKS AND FINANCEMarch 9, 2024 at 8:59 PM UTC

TLDR

Citigroup forecasts gold prices at $3,000/ounce and oil reaching $100/barrel in the next 12-18 months.
Factors like increased central bank gold purchases, stagflation, or a global recession could lead to a 50% surge in gold prices.
The most likely scenario for gold to hit $3,000 involves emerging market central banks accelerating de-dollarization, potentially undermining confidence in the U.S. dollar.

Citi suggests that gold prices could potentially surge to $3,000 per ounce, while oil could reach $100 per barrel within the next 12 to 18 months, contingent upon one of three potential catalysts.

Gold, currently trading at $2,016, could see a significant uptick of around 50% under several scenarios. These include a sharp increase in central bank purchases of the precious metal, the emergence of stagflation, or a deep global recession, as outlined by Aakash Doshi, Citi’s North America head of commodities research, in an interview with CNBC.

According to Citi analysts, the most plausible scenario for gold to reach $3,000 per ounce involves a rapid acceleration of an existing trend: de-dollarization among emerging market central banks. Such a trend could trigger a crisis of confidence in the U.S. dollar, leading to heightened demand for gold as a safe-haven asset.

Key Takeaways

Gold and oil are two of the most prominent commodities in the global market, each with its own unique significance for traders and investors. Gold, often regarded as a safe-haven asset, tends to see increased demand during times of economic uncertainty or geopolitical instability. As a result, price swings in gold can reflect shifts in market sentiment and risk appetite. On the other hand, oil, being a critical component of global energy markets, is influenced by factors such as supply and demand dynamics, geopolitical tensions, and economic growth trends. Price fluctuations in oil can have far-reaching implications, impacting industries, consumer spending, and inflation levels. For traders and investors, understanding and analyzing the movements in gold and oil prices is essential for making informed decisions and managing risk in their portfolios.

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