Multinational investment bank Citigroup has significantly upgraded its near-term price forecasts for precious metals, projecting substantial gains driven by multiple bullish factors. The bank expects gold to reach $5,000 per ounce and silver to surge to $100 per ounce within the next three months, citing strong investment momentum and persistent market drivers.

Upgraded Price Targets and Market Outlook

Citigroup's revised forecasts reflect considerable upside potential from current market levels. The gold price target represents a 9% increase from the current level of $4,589 per ounce, while the silver forecast indicates a potential 17% jump by April.

"We upgrade our near-term price forecasts across the precious metals complex as investment momentum remains strong and the multitude of bullish drivers are now likely to remain intact during 1Q26," a Citi note stated.

Key Market Drivers

Citigroup identified several factors supporting the bullish outlook for precious metals:

• Heightened geopolitical risks creating increased demand for safe-haven assets
• Ongoing physical market shortages, particularly affecting silver supplies
• Renewed uncertainty regarding US Federal Reserve independence
• Strong investment momentum across the precious metals complex

Recent Performance Across Metals Complex

The bank's analysis highlighted impressive recent performance across various metals, validating its longstanding bullish stance. Citi noted that its call for silver to outperform and for the precious metals bull market to broaden into industrial metals has delivered substantial returns.

Supply Chain and Trade Considerations

Citigroup emphasized persistent physical market tightness, particularly affecting silver and platinum group metals. The analysts highlighted potential risks from upcoming Critical Minerals Section 232 tariff decisions in the US, which could create "large binary risks on trade flows and prices."

In a high-tariff scenario, the bank warned that shortages could worsen temporarily as metal shipments rush into the US, potentially triggering extreme price spikes across affected commodities.

Longer-Term Market Expectations

Beyond the March quarter, Citigroup's base case scenario assumes some moderation in precious metals demand. The bank expects easing geopolitical tensions to reduce hedging demand later in the year, with gold being most exposed to this potential shift.

The analysts continue to favor industrial metals, particularly aluminium and copper, for sustained performance. They anticipate a neutral to slightly stronger US dollar environment with maintained Federal Reserve political independence, which could support continued outperformance of industrial metals over precious metals in a growth-oriented market scenario.

Market experts are advocating for continued investment in gold and silver despite recent record highs, emphasizing the long-term structural factors supporting precious metals. Bandhan AMC has launched new investment vehicles targeting these metals, with fund subscriptions opening from January 12 to January 20.

New Fund Launches Target Precious Metals Theme

Bandhan AMC has introduced both a Gold ETF Fund of Fund and a Silver ETF Fund of Fund, with the subscription period running through January 20. Gaurab Parija, Chief Business Officer at Bandhan AMC, emphasized that fund launches are driven by theme sustainability rather than short-term price movements.

"We always believe that fund launches are not basis the timing of the underlying pricing, but more importantly, on the sustenance of the theme. We believe that this theme is going to be lasting for a long period of time, and hence the timing is more incidental," Parija stated.

Structural Factors Support Gold's Long-Term Outlook

Sachin Jain, CEO of the World Gold Council, identified multiple global factors supporting gold's performance over the past 18 months. The combination of rising global debt levels, particularly in the US, ongoing geopolitical tensions, and trade-related uncertainties has created a favorable environment for gold investment.

Parija noted a structural shift in gold's perception, with the metal increasingly viewed as a store of value as central banks worldwide continue adding to their reserves. This represents an evolution beyond gold's traditional role as merely an inflation hedge or geopolitical risk protection.

Silver Benefits from Dual Demand Drivers

Silver presents a unique investment proposition with demand stemming from both precious metal and industrial applications. Parija highlighted that approximately 60% of silver consumption now originates from industrial sectors including electric vehicles, electronics, and renewable energy.

The supply side remains constrained, creating what experts describe as structural rather than cyclical deficits. However, investors should anticipate higher volatility in silver compared to gold.

Portfolio Allocation Recommendations

Both experts advocate for strategic portfolio diversification through precious metals allocation. They recommend gold allocation of approximately 10-15% of a portfolio, built gradually through instruments like ETFs to improve overall portfolio stability.

Key investment considerations include:

• Long-term perspective: Focus on portfolio allocation rather than tactical trading
• Gradual accumulation: Build positions systematically through ETF instruments
• Volatility awareness: Prepare for higher silver volatility compared to gold
• Diversification benefits: Enhance portfolio stability in uncertain global environment

While short-term corrections cannot be ruled out following the recent sharp rally, experts emphasize viewing these metals as long-term portfolio components rather than short-term trading opportunities. The World Gold Council, while not providing price forecasts, believes the current environment continues supporting gold over the medium to long term.