CITI thinks higher is in the cards for gold $3,000 per ounce gold by 2025, which banking giant Citigroup considered an extreme bullish outlier scenario only two months ago, has now become not only possible but likely, according to Aakash Doshi, Citi North America Head of Commodities Research.
“In the summer of 2019, I was in your studios calling for $2,000 an ounce as a base case over the next 12 months,” Doshi said during an interview with Yahoo Finance on Tuesday. “Now we think $3,000 an ounce is in play over the next year or so.”
Doshi said investor demand is the “big driver” that will make this come to pass. “We think financial demand for gold is only catching up to what is strong physical [demand],” he said, referring to reports of burgeoning bar and coin sales. “That is a global trend, we've seen bar and coin demand surge since the pandemic, it's now above pre-COVID trend, and that we think represents a strong alternative fiat demand story.”
“Separately we see the official sector, central banks in the emerging markets in particular, to buy a record amount of gold over the last several years, including over a thousand tons in 2024, which would be the third-highest since 1967,” he said. “We think this physical demand is structural, it is strong, it is driven by a host of factors, and financial demand for gold is only catching up to that.”
Doshi pointed out that gold prices are up around 20% since the February lows. “It hasn't been a weaker dollar, the dollar is higher,” he said. “It hasn't been lower real or nominal rates at the belly of the US Treasury curve, those are at year-to-date highs.”