Citi Research has raised its three-month gold price target from $3,200 to $3,500 per ounce, citing increased demand from Chinese insurers and heightened safe-haven flows due to tariff-related risks and market volatility.
Analysts at Citi note that the gold market is experiencing a rare physical deficit, necessitating higher prices to encourage stockholders to sell and balance the market.
This bullish outlook is supported by China’s recent policy allowing 10 insurers to allocate up to 1% of their total assets to gold, potentially generating annual demand of around 255 tonnes, approximately 25% of global central bank purchases.
Despite a 1% dip in gold prices on Thursday due to profit-taking, gold remains above the $3,300 mark, buoyed by a weaker U.S. dollar and rising U.S.-China trade tensions.
