Citi Sees Gold Topping $3,000 on Trump Tensions

Citigroup foresees gold hitting a record $3,000 an ounce within three months due to trade wars and geopolitical tensions stoked by President Donald Trump, Bloomberg reports.

Investors and central banks are moving into safe-haven gold on worries that tariffs will slow economic growth, reignite inflation, and disrupt global trade.

“The gold bull market looks set to continue under Trump 2.0,” wrote Kenny Hu and other Citi analysts, citing higher interest rates and slower growth.

Gold has continued to rise to successive records in the past few days due to fears over trade wars between the U.S. and major trade partners.

Bullion historically rises during periods of great uncertainty.

The Citi analysts also see the U.S. dollar appreciating in value, as central banks buy more gold to support their currencies and hedge against market and economic volatility.

Furthermore, fears of a 10% duty being imposed on physical gold have prompted dealers in London, the biggest market for gold bullion, to shift metal to the U.S. Citi analysts see a 20% chance that Trump will impose such a tariff.

“A Russia/Ukraine peace deal, and confirmation of whether gold would be exempt from broad tariffs (or not) could provide a buying opportunity over the next 2-3 months,” The Citi analysts said.

Gold is heading toward $3,000 a ounce, said David Neuhauser, chief investment officer of Livermore Partners, in an interview with CNBC last week.

“Inflation is going to run hotter this year with President Trump’s policies, and at some point in time, you will see some dollar weakness, and with that, of course, gold will react much more favorably,” said Neuhauser, CIO of the alternative asset manager catering to high-net-worth clients and institutional investors.

Gold reversed its multi-session rally Thursday, with spot gold falling 0.51% to $2,850.48 an ounce. U.S. gold futures fell 0.5% to $2,857.30 an ounce.

• David Neuhauser: Gold to Increase to Over $3,000