The prices of gold (per ounce) and oil (per barrel) can soar up to $3000 and $100 in the latest forecast predicted by Citi analysts.
Per the new report, the central banks have started purchasing gold at a rapid pace in the hope of amplifying credit and reducing credit risks.
The Citi report further outlines Russian and Chinese central banks leading the gold purchases with India, Turkey, and Brazil, queuing back in line.
Also Read: Gold Forecasted To Reach Fresh All-time High of $2,250
Gold and Oil Poised to Gain Momentum
The price of gold is expected to surge by as much as 50% if central banks continue to ramp up gold purchases.
“The most likely wildcard path to $3,000/oz gold is a rapid acceleration of an existing but slow-moving trend. De-dollarization across Emerging Markets central banks can in turn lead to a crisis of confidence in the U.S. dollar,” Citi analysts Doshi later shared.
The de-dollarization phenomenon, in simpler words, refers to a gradual process of moving away from USD as the chief currency used for initiating transactions.
If the crisis of confidence in the US intensifies, it is most likely that the banks will pivot towards making accelerated gold purchases.
“That could double the central bank’s gold purchases. This can challenge jewelry consumption as the largest driver of gold demand,” Doshi later clarified.
The global recession aspect is another crucial marker that can catapult gold prices to $3000.
“A deep global recession that could spur US federal reserves to cut rates will take us to $3000.” Doshi further elaborated.
Oil to Hit $100?
Another solid prediction made by Citi analysts foresees oil reaching $100 per barrel.
Also Read: Gold Price Falls Below $2000 For First Time in 2024
Per the new report, explosive oil pricing can be triggered by multiple global factors. This includes higher geopolitical risks, deeper OPEC+ cuts, and supply disruptions from key oil-producing regions.
The ongoing Israel-Hamas conflict has also hampered the current oil prospects and pricing.
“Iraq, Iran, Libya, Nigeria, and Venezuela are vulnerable to supply disruptions. Steeper U.S. sanctions on Iran and Venezuela potentially on the cards.” Doshi shared.