Citi(US:C) Hua Er Jie Jian Wen·2026-02-02 03:25Core Viewpoint - The current valuation of gold is facing severe reassessment due to tightening global liquidity and declines in Bitcoin and commodities, with Citigroup's research indicating that gold prices have significantly overextended future uncertainties [1] Group 1: Valuation Concerns - Citigroup's report highlights that the annual expenditure on gold as a percentage of global GDP has surged to 0.7%, the highest level in 55 years, surpassing the peak during the 1980 oil crisis [2] - The current gold price is detached from the marginal production costs of the mining industry, with high-cost gold miners experiencing profit margins at a 50-year high [4] - If the allocation of gold returns to historical norms of GDP percentage (0.35%-0.4%), gold prices could plummet to between $2500 and $3000 per ounce, despite a baseline target of $4600 for 2026 [5] Group 2: Future Outlook - In the short term (0-3 months), Citigroup maintains a bullish outlook for gold prices, projecting a target of $5400-$5600 per ounce due to ongoing geopolitical and economic risks [6] - For the second half of 2026, Citigroup expresses caution, predicting that the factors supporting high gold prices will diminish, including a potential resolution to the Russia-Ukraine conflict and a cooling of tensions in Iran [8] - The expectation of a "Goldilocks" economy in the U.S. during the mid-term elections in 2026 could reduce the demand for gold as a hedge, alongside anticipated independence from political pressures for the Federal Reserve [8]