Gold price outlook: Bullion may be near its peak as global tailwinds fade; Citi, BMI and Motilal warn of downside after 40% rally
The run-up in gold prices has been dramatic: from $1,797 per troy ounce in January 2022 to $3,342, a gain of 86% in just over two years. That climb was supported by persistent geopolitical tensions, especially in Ukraine and the Middle East, and consistent central bank accumulation of the asset, according to an ET report.
Gold price forecasts
Report
Short-term forecast ($/oz)
Long-term forecast ($/oz)
Citi Bank
3,000 – 3,500
2,500 – 2,700 (H2 2026)
BMI (Fitch)
3,000 – 3,100 *
2,720 (average for 2025–2029)
ICICI Bank
3,000 – 3,200
3,300 – 3,500 (by December 2025)
*
$3,100 is Fitch's annual average price forecast for 2025
But several experts now believe gold may be nearing the top of its current cycle.
BMI, a research arm of Fitch Ratings, said the metal could face downside pressure but stopped short of predicting a complete reversal. 'Despite our outlook for gold prices to weaken, we do not see a return to pre-Covid levels,' said the Fitch unit. 'Gold prices will average USD 2,720/oz during 2025–2029, compared with USD 1,393/oz in 2019.
'
Forecasts diverge as Fed policy and inflation become key
According to Citi, the price of gold may drop sharply from current levels, returning to a range of $2,500–2,700 per ounce by the second half of 2026.
In a Bloomberg report, Citi analyst Max Layton cited weakening investment demand, stronger global growth prospects, and upcoming interest rate cuts by the US Federal Reserve as possible triggers for a correction.
Motilal Oswal echoed the view that prices could stabilise or enter a consolidation phase. 'Historical data suggests that annual gains beyond 32% are rare,' it said in a recent note, warning that market fatigue was visible at current levels.
Analysts also pointed to upcoming Fed policy decisions, dollar movement, and inflation as key indicators to watch. BMI observed that if interest rates are lowered, bond yields may fall, making gold more attractive as a non-yielding but secure store of value.
Geopolitical risk remains, but caution is rising
Investors may still turn to gold in the event of a serious escalation in any ongoing conflicts, analysts said. However, if the Federal Reserve holds rates steady, a stronger dollar and higher bond yields could sap gold's appeal.
'Gold's appeal could weaken, pulling prices back to $2,500/oz,' BMI noted.
Meanwhile, ICICI Bank has taken a different view, projecting that gold could reach $3,300–3,500 per ounce by December. The bank said in a May report that a delayed but sharp easing cycle by the Fed may push real yields lower, prompting a shift toward physical assets like gold.
BMI also flagged a near-term watchpoint: the July 9 deadline for a pause on trade tariffs. If the global trade environment tightens further, gold prices could spike again in response to protectionist risks and retaliatory policies.
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