Gold prices have taken a sharp downturn in recent sessions, and according to global financial giant Citi, the slide may not be over yet.
Analysts expect further correction in gold prices as stronger U.S. yields, a resilient dollar, and easing geopolitical fears weigh on demand for the precious metal.
Citi’s projection signals a potential end to the recent bullish momentum in gold that had driven prices to record highs earlier this year.
What’s Behind the Gold Price Fall
Several key factors have contributed to the sudden dip in gold prices:
Rising U.S. Treasury Yields:
As bond yields increase, investors move away from non-yielding assets like gold, seeking higher returns elsewhere.
Stronger U.S. Dollar:
A firm dollar makes gold more expensive for buyers using other currencies, reducing global demand.
Easing Safe-Haven Demand:
Reduced geopolitical tension and improving global economic sentiment have curbed the need for safe-haven assets.
Central Bank Stance:
Expectations that major central banks will delay rate cuts have also limited gold’s upside potential.
Citi’s Gold Price Projection
Citi’s latest commodity outlook indicates that gold could dip further in the short term before stabilizing in 2025.
The bank estimates that:
Gold may fall toward $2,200 per ounce, a correction from recent highs near $2,400.
Volatility will persist, especially as global markets adjust to interest rate and inflation expectations.
Medium-term recovery is possible if central banks resume large-scale buying or if geopolitical risk resurfaces.
Citi’s analysts emphasize that while the long-term fundamentals of gold remain intact, short-term momentum is clearly bearish.
Domestic Market Impact (India)
In India, gold prices mirrored the international trend, falling sharply on MCX.
The MCX gold futures dropped below ₹70,000 per 10 grams.
Traders reported lower retail demand amid high volatility and festive season fatigue.
Jewelers expect consumers to wait for further price stabilization before making fresh purchases.
Expert Opinion
Market analysts believe that gold may continue to experience pressure until the U.S. Federal Reserve’s next policy signal.
However, they also note that any sudden geopolitical tension or inflationary spike could revive gold demand.
Experts recommend investors:
Avoid panic selling
Diversify portfolios
Consider phased accumulation if prices correct further
❓ FAQ
Q1: Why are gold prices falling now?
Rising U.S. yields, a stronger dollar, and fading safe-haven demand have triggered a correction in gold prices.
Q2: What does Citi’s forecast say?
Citi projects that gold may fall further to around $2,200 per ounce before stabilizing.
Q3: How will it impact Indian buyers?
Gold in India may stay volatile, with prices adjusting in line with international trends and the rupee’s movement.
Q4: Should investors buy gold now?
Experts suggest waiting for prices to settle or buying gradually instead of making large purchases immediately.
Q5: What could push gold higher again?
A rise in inflation, renewed geopolitical risks, or strong central bank buying could trigger a rebound.
Conclusion
Citi’s warning of a further fall in gold prices highlights the shifting dynamics of global markets in 2025.
While short-term weakness may continue, gold’s long-term appeal as a safe-haven and inflation hedge remains strong.
For investors, this could be a time for patience and strategic positioning rather than panic.
Published on : 28th October
Published by : SMITA
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