Citi remains bullish on gold and raises its 3-month price forecast to $2,800 an ounce

(Reuters) – Citi Research raised its three-month gold price forecast, citing possible further deterioration in the U.S. labor market, interest rate cuts by the Federal Reserve and purchases of physical assets and ETFs, it said on Monday.

The bank raised its three-month gold price forecast to $2,800 an ounce from $2,700 previously, adding that its six- to 12-month forecast was $3,000.

He revised his 6-12 month silver price forecast upward to $40 an ounce from $38 an ounce.

“We note that gold and silver have performed very well despite weaker retail physical demand in China and rising US interest rates since the Fed cut rates by 50 (basis points) and job growth exceeding historical levels month,” the message says.

Gold should also rise in a scenario in which oil surges due to short-term escalation in the Middle East, he added.

Gold jumped to a record high on Monday while silver hit a nearly 12-year high as growing uncertainty around the US presidential election and war in the Middle East added to a gold rally already fueled by expectations of lower interest rates.

Citi said it remains neutral-bullish on platinum with a three-month price target of $1,025 an ounce and a six- to 12-month price target of $1,100 an ounce.

The company added that it is leaning bearish on palladium following recent price gains, with a three-month target of $1,000 an ounce and a six- to 12-month price target of $900 an ounce.

Citi also said oil fundamentals point to an average price of $60 a barrel in 2025, but the potential for near-term geopolitical escalation in the Middle East is high.

(Reporting by Anjana Anil in Bengaluru; Editing by Aurora Ellis)