Citi flags risks in gold’s recent rally
Analysts warn the precious metal’s upward momentum may not be sustainable amid shifting macro conditions.
Gold prices have extended gains this week, but Citigroup has cautioned investors against chasing the recent rally, citing elevated risks in the macroeconomic backdrop.
The bank’s strategists noted that while short-term momentum has driven prices higher, underlying fundamentals remain fragile. Geopolitical tensions and central bank policies continue to influence the market, but Citi emphasized that the sustainability of the uptrend is uncertain.
Analysts at the bank highlighted that gold’s recent performance has been supported by a weaker U.S. dollar and expectations of potential Federal Reserve rate cuts later this year. However, they stressed that these factors could reverse quickly, particularly if inflation data or labor market trends fail to align with market expectations.
Citi also pointed to the potential for a stronger dollar or a rebound in real yields, both of which could weigh on gold prices. The bank’s outlook suggests that while the metal may benefit from near-term sentiment, long-term risks remain skewed to the downside.
Investors are advised to exercise caution, as the current rally may lack the structural support needed for a sustained breakout.
David reports on energy, metals and agricultural markets, tracking how supply signals and safe-haven demand move prices across the commodities complex.
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