Gold and Silver Prices Soar: A Bullish Outlook for Precious Metals
Gold prices reached new highs on Monday, while silver prices touched their highest levels in over a decade. Citi strategists predict this upward momentum in precious metals will continue, potentially driving up prices of other metals as well.
Citi's Metals Forecast: An Optimistic View
In a recent note to clients, Citi analysts expressed a bullish view on gold and silver, as well as copper and aluminum. The team, led by Maximilian Layton, global head of commodities, believes that "the bull market in gold and silver has further to run, driven by the prospect of a new, more dovish Fed leadership (expected May-June 2026), associated lower US real rates, and dollar pressures. We expect this to eventually extend to copper and aluminum in 2026."
Factors Driving Price Increases
Factors driving precious metal prices include cyclical elements such as continued labor market weakness, concerns about US and global growth stemming from tariffs; and structural factors such as concerns about US debt and a weaker dollar.
The Impact of Government Legislation
Citi strategists also believe that "stimulus from a Big, Beautiful Bill will benefit households in H1 2026 and galvanize capital expenditure investment momentum, boosting US and global growth and market sentiment." They point out that this situation is "highly analogous to late 2007, early 2008."
Recommendations for Gold
Layton and his team indicate that "almost all the conditions are in place for a gold bull market," and recommend buying on dips, with a three-month target price of $3,800 per ounce, and expect gold prices to peak in the first quarter of next year. In a scenario of stagflation and increased concerns about the Fed's independence, their optimistic forecast sees gold reaching $4,000 per ounce in the coming months; while in a pessimistic scenario of slow economic growth and easing geopolitical tensions, gold prices could fall back to $3,400 per ounce.
Positive Outlook for Aluminum and Copper
For aluminum prices, analysts express being "very bullish" over the next 6-36 months, describing any pullback as a "strong long-term buying opportunity."
Layton and his team add, "The aluminum industry is highly correlated to AI data centers, humanoid robots, and other robotics areas – these future-facing areas are competing for power, driving aluminum demand (aluminum production is extremely power intensive), while China is putting a cap on aluminum capacity." As for copper prices, their base case forecast for the next 6-12 months is $12,000 per ton (implying a 20% gain), with an optimistic forecast of $14,000 per ton.
Although they are "neutral on copper prices in Q4 2025, copper prices will benefit from structural energy transition and AI trends; and given a dovish Fed outlook (especially post-May 2026) and associated lower US real rates, copper prices are highly correlated to a rebound in US and global growth expectations in 2026."
Revising Previous Forecasts
It is worth noting that Citi warned in June that gold prices could face a downturn in 2026. However, the institution has walked back some of that negative sentiment in its latest forecast.
The institution raised its Q1 2026 gold price forecast from $2,900 per ounce previously to $3,700 per ounce; and expects gold prices to fall to $2,800 per ounce by Q4 2026, slightly above the previous forecast of $2,600 per ounce.
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