Citi Expects Gold to Climb to $3,600 Over Next Months

Gold Market Analysis - Gold started the year at $2,600 and is now near all-time record highs around $3,500-$3,600 [1] - Gold spending is running at approximately $600 billion annualized, exceeding 0.5% of GDP, marking a 50-year high [2] - New gold buyers are attempting to induce existing stockholders to sell, requiring about 1% of total stockholders to sell their stocks to meet fresh demand [4] - Baseline scenario anticipates gold prices reaching $3,600, influenced by the FOMC's dual mandate and inflation exceeding targets [6] Silver Market Analysis - Silver has broken through $40 per ounce, levels unseen since 2011, driven by investors shifting into silver as a leveraged play on gold [7][8] - Investment demand for silver has increased significantly in the last 3 to 4 months, alongside a genuine deficit market [9] - The market is trying to price the marginal silver stockholder to sell their inventory to new investors [10] Oil Market Analysis - The firm views rallies in oil above $70 a barrel as selling opportunities and dips below $60 a barrel as buying opportunities, suggesting a target range of $60 to $70 [10] - Headline surpluses of over 1 million barrels are not materializing, raising concerns about potentially underestimated demand growth [11] - China's stockpiling of surplus oil is a factor preventing prices from falling as low as consensus believes [12][13] Tariffs Impact on Metals - The market has largely priced in the tariffs applied by the Trump administration on major metals like copper, aluminum, and steel [15] - Palladium is vulnerable to tariffs under Section 232 on critical minerals, potentially leading to a 50% price increase [15][16]