Citi and UBS Predict Significant Gold Price Correction; Miners Downgraded
Citi and UBS Predict Significant Gold Price Correction; Miners Downgraded
Citi and UBS, major investment banks, forecast a substantial gold price decline of approximately 20% in the coming year. This prediction follows a period of significant growth (108% since late 2022 and 45% in the last 12 months), with gold recently trading around $3394/oz.
The projected downturn is attributed to several factors: improving global economic growth and anticipated interest rate cuts by the Federal Reserve. Citi anticipates weakening investment demand for gold in late 2025 and throughout 2026.
This bearish outlook has led to downgrades in several gold mining companies. UBS downgraded Evolution Mining to “sell” and Northern Star to “neutral,” while Newmont received a “buy” rating due to its strong free cash flow.
Citi advises gold miners to hedge against potential price drops below $3600-$3700/oz using long-dated forward contracts, which currently indicate a $4000/oz price in five years. Citi projects a gold price consolidation between $3100/oz and $3500/oz in the next three months, eventually falling to $2500/oz-$2700/oz by the second half of 2026 due to a projected peak in gold deficit this year and subsequently lower investment demand.
Disclaimer: This content is aggregated from public sources online. Please verify information independently. If you believe your rights have been infringed, contact us for removal.