Core Insights - Gold futures have surged past $4,000 per ounce, marking the fastest rise since the Nixon Shock, driven by persistent inflation, rising unemployment, and a weakening dollar [1][4] - The Nixon Shock in 1971 ended the dollar's convertibility into gold, leading to rampant inflation and a loss of trust in the dollar, which parallels the current economic conditions [2][3] Market Dynamics - Since February 2024, gold prices have doubled, with the last similar increase occurring in the 1970s post-Nixon Shock [4] - The US M2 money supply has increased significantly alongside gold prices, influenced by trillion-dollar deficits and low interest rates [5] - The US Dollar Index has dropped 10% year-to-date, marking its steepest decline in four decades [5] Economic Indicators - Unemployment exceeds job openings by 157,000, the widest gap since March 2021, indicating a troubling labor market [5] - Inflation remains high, with 60% of Consumer Price Index items rising by at least 3%, while the Federal Reserve is cutting rates, risking stagflation [6] Institutional Investment Trends - Institutional investors are increasingly moving into gold, with Goldman Sachs raising its 2026 gold price target to $4,900 per ounce, indicating durable demand from ETFs and Central Banks [7]

Core Viewpoint - Citigroup predicts a continued rally in gold and silver, with potential opportunities emerging in copper and aluminum by 2026, driven by economic factors and changes in U.S. monetary policy [1][4]. Group 1: Precious Metals Performance - Gold prices increased by $44.40, or 1.2%, reaching $3,750 per ounce, aiming for a new closing high, potentially its 36th this year [2]. - Silver rose over 2% to $43.86 per ounce, with an intraday peak of $44.10, the highest level since August 2011, as investors anticipate a new settlement high [3]. Group 2: Future Outlook for Metals - The bull market for gold and silver is expected to broaden into copper and aluminum by 2026, influenced by anticipated dovish Federal Reserve leadership and lower U.S. real interest rates [4]. - Factors driving this trend include a weak labor market, tariff-related growth concerns, U.S. debt worries, and a weakening dollar [5]. Group 3: Investment Strategies - Citigroup suggests buying dips in gold, targeting $3,800 per ounce in the next three months, with a peak expected in the first quarter of the following year [6]. - The bullish scenario for gold could see prices reaching $4,000 amid stagflation and Fed independence concerns, while a bearish scenario could see prices drop to $3,400 [6]. - For aluminum, the strategists express strong bullish sentiment over the next six to 36 months, indicating that any price dips should be viewed as long-term buying opportunities [7].