According to analysts at Citi, a higher risk aversion environment should further boost prices

Gold fell this Tuesday but comes from hitting record highs, as safe-haven demand remained supported by geopolitical tensions in the Middle East. In this context, Citi believes that $3,000 per ounce could be reached.

Spot gold fell by 0.5% to $2,370.27 per ounce, staying close to the record highs reached on Friday at $2,431.53 per ounce.

The recent rise in the precious metal was largely due to worsening geopolitical tensions in the East, after Iran attacked Israel over the weekend.

Gold is traditionally considered a safe haven due to the relative stability of its price, especially in times of global conflict.

“The recent surge in gold has been fueled by geopolitical heat and coincides with record levels in stock indices; therefore, an environment of higher risk aversion should further boost prices,” Citi analysts noted.

And most importantly, the gold bullion complex has decoupled from interest rates and the US dollar, suggesting that the market is supported by solid factors of physical consumption (such as imports from India and China, bullion and coins), alternative metal demand, geopolitical hedges, and central bank purchases.”

The bank raised its benchmark gold price forecasts to the bullish scenario.

“We project $3,000 per ounce of gold for the next 6-18 months, which is 20% above futures and more than 25% higher than spot prices.”