Citi raises three-month gold price forecast to $3,800 an ounce

Sept 19 (Reuters) - Citi raised its gold price forecast on Friday, predicting that it will reach $3,800 an ounce in the next three months, up from a previous estimate of $3,600, citing cyclical and structural factors expected to support bullion prices in the near term.

The bank said continued weakening of the U.S. jobs market, alongside tariff-driven concerns over U.S. and global growth, are likely to keep cyclical pressures supportive of gold.

On the structural side, Citi pointed to rising concerns over U.S. fiscal deficits, the status of the U.S. dollar and concerns around Federal Reserve independence.

"In our base case (60% probability), we see gold prices reaching new record highs of $3,800/oz over the coming months before peaking in the first quarter of 2026 on an eventually improving growth outlook and subsequent rotation out of gold," the bank added.

The bank said gold could hit $4,000/oz in the coming months if the U.S. faces stagflation or a hard economic landing, prompting aggressive Fed rate cuts and stronger investment demand.

Gold soared to a record high on Wednesday after the Fed cut interest rates by a quarter of a percentage point.

However, prices could fall to $3,400/oz if there is quick progress in remaining tariff negotiations, geopolitical risks ease and the U.S. economy holds up, reducing the need for policy easing, the bank added.

Spot gold XAU= was up 0.4% at $3,657.15 an ounce by 1008 GMT on Friday. GOL/