Citigroup Warns of Possible Decline in Gold Risk Premium by Year-End – $XAU
Citigroup emphasized on Friday that the present robustness of gold is supported by a combination of geopolitical and macroeconomic uncertainties. Nonetheless, the bank cautions that almost 50% of these risk factors could diminish prior to the end of 2026.
Important factors like U.S. debt worries and uncertainty surrounding AI are predicted to keep gold prices elevated beyond historical averages, offering some protection for investors. However, Citigroup predicts that several of the risks presently considered in gold may either not occur next year or could be temporary.
The bank observed that “anticipations of ‘American-style gold stability’ before the 2026 midterms, a possible resolution in the Russia–Ukraine conflict, and a slow decline in Iran-related tensions might together lessen the risk premium on gold.”
Moreover, Citigroup highlighted that if Kevin Warsh's appointment is approved, it would indicate the Fed's sustained political autonomy—creating an additional medium-term challenge for gold.
Gold investors might have to prepare for a phase of adjustment as these risk factors change.
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