Citi(US:C) Hua Er Jie Jian Wen·2025-11-13 02:27Core Viewpoint - Despite a recent rebound in gold prices of approximately $300, a key momentum indicator, the Relative Strength Index (RSI), suggests that the upward momentum may not be exhausted yet. Citigroup's latest gold outlook report predicts a potential surge to $6,000 per ounce under specific scenarios, driven by a significant global wealth reallocation [1][5]. Group 1: Price Predictions - In a bullish scenario with a 30% probability, gold prices could reach $6,000 per ounce by the end of 2027, driven by a large-scale reallocation of global wealth [5]. - The base case scenario predicts gold prices will "grind lower" to $3,650 per ounce by 2026, with a 50% probability, as the U.S. economic environment improves [6]. - A bearish scenario with a 20% probability suggests that gold prices could fall to $3,000 per ounce by the end of 2026 or 2027 if geopolitical and economic concerns ease significantly [6]. Group 2: Investment Demand - U.S. investors are identified as the primary drivers of the recent gold price increase, with net inflows into gold ETFs in the U.S. accounting for 60.9% of global totals since 2025 [10][11]. - The report highlights that the net investment demand outside of central banks is running at an annualized rate exceeding $350 billion, marking a historical high [10]. Group 3: Market Dynamics - The current physical gold market is experiencing a significant "gap," estimated to exceed 1,000 tons annually, indicating that new buying demand far exceeds the supply from mining and recycling [13]. - The average allocation of gold in global household wealth is at a historical high of approximately 3.5%, with a potential increase to 5.0% requiring an amount equivalent to 18 years of global gold mine production [5][11]. Group 4: Valuation Concerns - The report indicates that gold is currently "very expensive," with prices significantly above marginal production costs, leading to the highest profit margins for high-cost gold miners in nearly 50 years [7]. - Global gold expenditure as a percentage of GDP has surpassed 0.55%, the highest level in 55 years, raising concerns about valuation [7].