Citi Wealth Insights

After a quiet August and end-of-summer lull, Citi analysts believe gold ETF inflows could surge in September.

Gold spot price recently breached US $2,000/oz and may hit US$2,100/oz this quarter and US$2,300/oz in the next 6-12 months, with risks skewed to the upside.

While commodities are recovering from the depths of the demand shocks that accompanied the rapid global spread of COVID-19 in 2Q, the road to full recovery is likely to remain bumpy.

Gold continues to lead commodities in year-to-date performance, proving to be an outperformer and acting as risk hedge in portfolios. Citi analysts continue to see gold prices trending up in the medium-term. Following a volatile 2Q, crude oil prices may be supported by demand improvements and lower supply.

Citi analysts remain medium-term bullish on gold, but see a likely slower grind higher, expecting 2020’s prices to average US$1,680/oz.

Record reductions in physical demand and increases in inventory are likely to continue to challenge commodities in 2Q.