Major analyst resets gold price target after shocking economic data | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

In times of inflation and economic turbulence, some investors turn to gold as a safe haven.

Many experts and veteran analysts agree that gold is a solid long-term investment. It usually acts as a hedge amid geopolitical and fiscal challenges.

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However, one of the most successful investors of our time, the legendary Warren Buffett, avoids investing in gold. In fact, he considers it useless.

But why?

He once said gold “doesn’t do anything but sit there and look at you.”

While this is literally true (except the looking part) and Buffett’s investment strategies shouldn’t be questioned, patient investors who have invested in gold in 2024 or at the beginning of 2025 have been rewarded.

Compared to the same time last year, gold prices are now more than 40% higher.

A considerable jump happened in April. This followed President Donald Trump’s tariff announcement on so-called “Liberation Day,” showcasing gold’s dependence on economic and political changes.

To understand how impressive a more than 40% return is, we should compare it to other assets, such as stocks or major indexes. For example, the S&P 500 is up 22.05% over the past 12 months.

However, such a significant gain may not happen often enough to make gold the only investment in a person’s portfolio. Many experts recommend a diversified portfolio, which means no more than 10% invested in gold.

A 40% return over the past 12 months is not bad for a yellow metal that does nothing, but will it continue to go up?

Earlier this week, commodities analysts at Citigroup offered their projections.

Citigroup analysts share revised gold price projections.

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Citi raises gold outlook on harsh U.S. economic instability

Citigroup Inc. revised its projections for gold, now expecting it to reach a record high in the short term, influenced by the crumbling U.S. economy, rising inflation, and ever-changing tariffs.

Over the next three months, gold is expected to trade between $3,300 and $3,600, partly due to U.S. import levies averaging higher than the expected 15% analysts wrote in an Aug. 4 note, as reported by Bloomberg.

“The market has been concerned about a U.S. recession due to high interest rates for the past three years, buying gold to hedge the downside risks,” analysts, including Max Layton, wrote. “This fear has likely only increased over the past six months given President Trump’s largest-in-a-century trade tariff agenda.”

In June, the bank projected that gold would trade between $3,100 and $3,500. Now, it is resetting the gold price target, expecting a weaker dollar and inflation challenges to continue in the second half of the year.

“U.S. growth and tariff-related inflation concerns are set to remain elevated during 2H’25, which alongside a weaker dollar, are set to drive gold moderately higher, to new all-time highs,” the bank said, as reported by Reuters.

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After reaching a peak of $3,500 an ounce in April, according to JP Morgan, gold’s price has been relatively stable, and Citi’s new projections are similar to those of other major analysts.

Depressing U.S. outlook unites analysts on gold price projections

The majority of Wall Street analysts are bullish on gold prices. Goldman Sachs analysts projected in June that gold would end the year at $3,700 per ounce, based on strong central bank demand, reports Invezz.

Reuters’ poll of 40 analysts and traders revealed an average forecast of $3,220 per troy ounce, up from the $3,065 they predicted three months ago. A troy ounce is slightly heavier than a standard ounce, equivalent to 31.1 grams, versus 28.35 grams.

Moreover, Fidelity International recently said gold could reach $4,000 an ounce by the end of 2025, as the Federal Reserve cuts rates, the dollar declines, and central banks keep adding holdings, reported Bloomberg.

J.P. Morgan Research projects prices will average $3,675 an ounce by the final quarter of 2025, rising toward $4,000 per ounce by the second quarter of 2026.

U.S. investors who invested in gold might feel slightly conflicted when hearing the news of this commodity’s price increase. While they are earning a profit as gold’s price rises, the U.S. economy is likely struggling.

For example, an investor might seem to have gained 10% on their gold investment, but if the dollar weakened over the same period by 5% due to inflation, the investor’s real inflation-adjusted gain would be much less.

Or while an investor might be pleased to have profited from a gold investment, they might have lost their job due to labor market challenges caused by a weak economy.

Nonetheless, a gain is a gain, especially in times of recession.

Key concerns causing higher gold price projections:

Inflation;
Steep tariffs on exports from many trading partners;
Weaker U.S. labor data in the second quarter of 2025;
The weakening dollar;
Political instability.

Gold was trading at $3,383.86 per ounce during Aug. 5’s morning session.