Weekly Gold, Silver, and Market Wrap

Well, Citibank just did a complete 180 on gold... and now forecasts new record highs before the end of the year.

Just six weeks after lowering its forecast and warning that gold could drop below $3,000 before the end of the year, Citibank now projects gold will hit $3,500 an ounce over the next three months. That would put it in range to eclipse the record high hit in April.

Citi also raised its expected gold trading range to $3,300 to $3,600, up from $3,100 to $3,500 previously.

In June, Citi had actually lowered its 6 to 12-month gold price forecast to $2,800 per ounce from $3,000.

Citi analysts remain worried about the impact of tariffs on the global economy and also cited dollar weakness as a reason to be bullish on gold.

The dollar charted its worst start to a year since 1973. In fact, one could argue that it’s not so much that the gold is going up but that the greenback is sagging. Gold is reflecting the devaluation of the U.S. currency.

There also appears to be a developing bear market in bonds. U.S. Treasuries have historically been a go-to safe-haven asset. However, Treasury yields increased as bonds sold off in April at the height of geopolitical uncertainty.

The note pointed out that U.S. import tariffs set in many of the trade deals reached in recent weeks were higher than expected, including taxes levied on major trading partners, including Canada, India, Brazil, and Taiwan.

Citi analysts also cited increasing weakness in the labor market and continued geopolitical risk, particularly relating to the war between Russia and Ukraine. Additionally, they noted declining “institutional credibility” in the U.S. due to President Donald Trump’s incessant pressure on Federal Reserve Chairman Jerome Powell and the recent firing of Bureau of Labor Statistics Commissioner Erika McEntarfer.

Citi notes that gold demand has exploded, rising about 33 percent since 2022. In that time, the price has nearly doubled. Analysts cite strong investment demand, continued central bank gold buying, and a relatively resilient jewelry market despite headwinds created by higher prices.

Meanwhile, Russia isn't the only nation using its extensive gold holdings to keep its economy afloat amid aggressive Western sanctions. Recent reports indicate Iran is doing so as well.

Through the first six months of the Iranian calendar year, Iran imported 43 tonnes of gold valued at $2.5 billion. That was a sixfold increase compared to the same period the previous year.

According to the World Gold Council, Iranian gold imports exceeded 100 tons worth over $8 billion in 2024, representing roughly 11 percent of the country’s total imports.

According to Iran International, “Gold has become a key safe-haven asset in Iran as the country navigates sanctions, currency volatility, and political uncertainty.”

A former Iranian bank chief recently said gold “vaccinates” the Iranian economy against global sanctions, dismissing concerns over a possible snapback of sanctions under the 2015 nuclear deal.

The Iranian government has encouraged the flow of gold into the country. According to media reports, officials have allowed some exporters to import gold instead of repatriating foreign currency.

Typically, exporters receive payment in a foreign currency, often the U.S. dollar. These foreign currencies are then held in the Iranian banking system as reserves. Instead, the government is allowing exporters to use foreign currency to buy gold, which is then held instead of foreign fiat. This enables Iran to more easily sidestep sanctions and manage its reserves.

It also creates economic security. While foreign governments can freeze assets denominated in their own currencies, they can’t freeze gold. It is money – recognized and accepted worldwide.

Despite their best efforts, the West has found it difficult to stop countries like Iran and Russia from using gold due to its fungible nature (meaning it’s easy to exchange) and the global demand for the precious metal.

Gold is money, and it is recognized as such everywhere. Even if they don’t want dollars or some other fiat currencies, everybody wants gold.

This is not to justify these countries' wartime policies. It merely underscores the nature of gold as money and its important role in the global economy. When fiat currencies are cut off or fail, gold will always remain a viable alternative.

This is precisely why so many countries are accumulating gold at a rapid pace.

Gold represents financial security – even when the world is against you.

And finally, let’s take a look at the weekly price action in the metals. Gold is back above $3,400 now, having rallied 0.9% since last Friday’s close and currently checks in at $3,407 an ounce. News about tariffs being imposed on gold kilo bars coming out of Europe has given gold a boost as the market is once again digesting the ever-changing U.S. tariff policy.

As for silver, the white metal is up well more than $1 or 3.5% to come in at $38.52 an ounce. Platinum is up 1.5% and trades at an even $1,350 an ounce. And lastly palladium is the biggest loser among the precious metals this week. The industrial metal has shed 6.2% to check in at $1,161 an ounce as of this Friday morning recording.

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