Gold Prices Slide as Global War Fears Taper

Gold futures are down by about 0.80% on Friday following President Trump’s decision for the U.S. to stay out of the Israel-Iran conflict for at least two weeks in order to provide a window for negotiations. The precious metal is often viewed as a safe-haven asset that generally performs well during times of economic uncertainty. As a result, investors may diversify some of their capital into gold given its lack of correlation with stocks.

Citi Lowers Gold Price Forecast to $2,800

Another factor sending gold lower is Citi’s price target reduction. The bank lowered its six to 12 month price target to $2,800 from $3,000 and its zero to three month price target to $3,300 from $3,500. Citi cited its expectation for lower interest rates, which could stimulate the economy and provide a boost to stocks, negatively impacting the investment rationale for gold. If geopolitical pressures persist or worsen, Citi believes that gold will be able to surpass its all-time high of $3,500 during the third quarter.

Spot gold has returned nearly 30% year-to-date.