Gold’s Next Rally Could Start When the War Ends

Gold has climbed back above $4,100, but Citi sees a bigger opportunity ahead — and it could come from easing tensions in the Middle East.

Citi expects gold to reach $4,500 in the next three months and potentially $5,000 within 6–12 months, if the Strait of Hormuz reopens and tensions between Yemen and Saudi Arabia ease.

The logic is not as unusual as it sounds. High oil prices have fuelled inflation fears and expectations of higher interest rates, putting pressure on gold. If tensions ease and oil falls, inflation concerns could cool, giving the Fed more room to cut rates. Lower yields and a weaker dollar would then support gold.

Key levels to watch

Gold recently climbed to around $4,135, with the $4,200 level now in focus. A sustained break above it could open the way toward $4,400. On the downside, $4,000 is an important psychological support; a drop below it could weaken the recovery.

Friday’s US jobs report is another near-term catalyst. Strong employment data could revive expectations of a Fed rate hike and put pressure on gold, while weaker figures may give buyers more room.

Citi’s $5,000 outlook is a longer-term scenario, not an immediate price target. For now, watch oil prices, the dollar and whether gold can hold above $4,000.