Banks Scrambling to Update Forecasts as Gold Closes in on $4000

Gold gains outpacing the most bullish forecasts

It’s been another huge week for gold as the price broke through US$3800 an ounce and threatened to crack US$3900/oz.

Spot gold traded as high as US$3896/oz on Wednesday before easing on Thursday.

Meanwhile, spot silver rose as high as US$47.95/oz and is closing in on its all-time high of just over US$50/oz.

Prices are rising so fast, forecasters are struggling to keep pace.

Last month, Citi set a new three-month price target of US$3800/oz.

Earlier this week, the bank upgraded its three-month target to US$4000/oz and lifted its silver price forecast from US$45/oz to US$55/oz, noting that its sharp silver price upgrade reflected an increasing likely switch into silver as gold approached US$4000/oz.

Its six to 12-month price targets remain unchanged at US$3000/oz gold and US$45/oz silver.

Citi analysts, led by Maximilian J Layton, said they were reluctant to call a ceiling for the gold price.

“Gold is like the art market – prices have completely disconnected from marginal production costs (with the highest producer margins in 55 years), and we are at lofty price levels on most valuation metrics,” the group said.

“The eventual physical market response function to higher gold prices is likely to be large in terms of lower jewellery demand and more scrap in the coming quarters but is also likely to materialise slowly.”

Citi said it had successfully tactically traded gold this year and suggested remaining bullish near-term.

Earlier this week, the US Supreme Court ruled that Lisa Cook could remain as chair of the Federal Reserve for now, despite US President Donald Trump’s attempts to remove her.

Citi said if Cook was allowed to vote on the Fed board in February 2026, policy was more likely to remain in line with the mandate through mid-next year.

Another potential catalyst for precious metal prices was the Supreme Court’s ruling on Trump’s tariffs.

“If the court strikes down most tariffs, this will widen the US deficit, otherwise we see significant tariffs [of] 10-15% throughout President Trump’s term exacerbating related inflation, growth, and labour market concerns,” Citi said.

Australian firm Argonaut also upgraded its gold price forecasts on Monday.

It lifted its December quarter forecast by 11% to US$3750/oz and its March and June quarter 2026 forecasts by 13% to US$3850/oz and US$3950/oz, respectively.

Argonaut expects gold to reach US$4000/oz in the September quarter 2026.

“We have also upgraded our medium-term gold price forecasts, with our peak price increasing from US$4000/oz to US$4500/oz by the end of 2027,” Argonaut analysts, led by Hayden Bairstow, said.

The firm expects the gold price to remain at above US$4000/oz until 2030, when it will fall to US$3650/oz.

“We have also increased our long-term gold price assumption by 14% from US$2200/oz to US$2500/oz,” it said.

Both Goldman Sachs and Deutsche Bank also seek the gold price exceeding US$4000/oz in 2026.