Investment experts at Citi are predicting a surge in gold physical investment demand in 2024 and beyond. According to their latest report, they are maintaining their gold price targets at $2,500/oz for the next 0-3 months and $3,000/oz for the next 12 months. They anticipate that average quarterly prices will continue to rise over the next year, with a projected trading range of $2,800-$3,000/oz in 2025.
The data from the 2Q24 World Gold Council suggests that the growth in bullion consumption may face some challenges in the third quarter of 2024. However, these challenges are expected to be balanced out by official sector purchases, over-the-counter and ETF investment demand, and favorable Indian tax policies.
The strategists at Citi also highlight a potential increase in investor gold demand due to a reversal in the multi-year bullion ETF de-stocking trend. They project that gold physical investment demand as a share of mine supply will rise to 83% in 2024 and further increase to 85% in 2025, the highest levels since 2020.
Central bank gold demand is also expected to remain strong in the coming years, despite a temporary absence of reported purchases by the People’s Bank of China. Citi has revised down its 2024 estimate for central bank gold demand but still expects a robust figure. The firm anticipates that the PBOC will resume gold purchases, especially in response to potential U.S. trade tariffs in 2025.
Overall, the report suggests a positive outlook for gold investment demand, with potential support from lower policy rates and central bank purchases. Despite a recent decline in bar and coin demand, driven by weak flows from Western markets, the experts at Citi remain optimistic about the future of gold as an investment asset.
In conclusion, if you’re looking to diversify your investment portfolio and capitalize on the potential growth in gold demand, now might be a good time to consider adding gold to your investment strategy. Keep an eye on the market trends and stay informed about the latest developments to make informed investment decisions.