XAU/USD: Higher average gold prices seem likely – CitiBank

Matías Salord FXStreet

Analysts at Citibank forecast gold (XAU/USD) at $1700/oz in a 1-3 month horizon and at $1900/oz in 6 to 12 months.

Key Quotes:

“Fed member mentions that the SME lending program may still take a couple of weeks to start, leading to tight onshore US dollar liquidity, favoring the US dollar and dragging down gold. However, nonfarm payrolls fell by 701K in March and the unemployment rate rose to 4.4%, which was worse than expectations. Money flowed into gold for risk aversion and limited the decline of gold price.”

“Gold/USD may rise toward 1704 upon consolidation, with pivot supports at 1536 and 1553.

“We think higher average gold prices seem likely with US policy rates now at the ZLB and extraordinary monetary stimulus across the G3. There is also $10Tn of negative yielding debt outstanding globally, unlike in 2008, which may reduce the opportunity cost of holding gold.”

Author

Matías Salord

FXStreet

Matías started in financial markets in 2008, after graduating in Economics. He was trained in chart analysis and then became an educator. He also studied Journalism. He started writing analyses for specialized websites before joining FXStreet.

GBP/USD extends the drop to 1.3360

GBP/USD builds on Monday’s decline and briefly clinches five-day lows near 1.3360 on Tuesday. Cable’s extra pullback follows the better tone in the Greenback as uncertainty in the Middle East prompts investors to adopt a cautious stance. Meanwhile, an apathetic UK labour market report also collaborates with the selling pressure on the British Pound.

EUR/USD stays offered just above 1.1400

EUR/USD keeps the downtrend well in place for yet another day, challenging the 1.1400 contention zone on Tuesday. The continuation of the selling impulse in spot comes amid decent gains in the US Dollar, which continues to find support in the persistent effervescence surrounding the US-Iran crisis.

Middle East crisis intensifies, Gold up

Gold now seems to have embarked on a consolidative phase below the key $4,100 mark per troy ounce in the latter part of Tuesday’s session. Meanwhile, uncertainty surrounding the Middle East conflict and rising expectations for a hawkish Fed policy outlook are expected to limit the precious metal’s bullish momentum in the near term.

XRP extends recovery as on-chain activity grows

Ripple (XRP) ticks up and trades around $1.13 at the time of writing on Tuesday. This rebound aligns with a broader recovery in the cryptocurrency market, attributed to reports that mediators between the United States (US) and Iran are seeking a 10-day cessation of strikes to find a way back to the signed Memorandum of Understanding (MoU).

The Iranian war has again risen

The Iranian war has again risen to the top of the economics factor list. There is no end in sight. Intelligence experts say the current level of offense/retaliation will not change minds in Tehran, while in Washington, Trump fears all-out war, which would mean boots on the ground.

US Dollar mid-year outlook: Exceptional currency, exceptional risks?

The US Dollar enters the second half of 2026 in a markedly different position from a year ago. The King currency has recovered, reflecting persistent US inflation, changing expectations for Fed policy, geopolitical tensions and renewed demand for defensive assets.