In a surprising turn of events, while the world grapples with geopolitical turmoil and looming wars, gold—historically considered a safe haven during times of crisis—is on a steady decline. Even with the global uncertainty that typically sends gold prices skyrocketing, the current trend tells a different story. And now, one of America’s largest financial institutions, Citi Bank, has made a bold prediction that could shift the way investors view gold in 2025 and beyond.
Gold Drops Sharply Despite Global Instability
On the surface, this might sound counterintuitive: war, inflation, and economic tension often drive investors toward gold. However, the price of gold continues to drop. As of today, gold has fallen by $29, bringing it down to $3,344 per ounce, or around $4,028 per damlung (a local measurement used in some Asian markets).
This drop is notable, not only because of its timing but also due to how consistent the decline has been over recent months—even as political tensions increase in Eastern Europe, the Middle East, and Asia.
Citi Bank Forecast: Gold May Plunge to $2,500 by Mid-2026
According to a recent analysis published by MarketWatch, Citi Bank has projected that gold could fall even further in the coming year. The bank forecasts a price range between $2,500 and $2,700 per ounce by mid-2026, equivalent to roughly $3,012 to $3,253 per damlung or $301 to $325 per chi (traditional units of gold weight in some Southeast Asian countries).
This would mark one of the lowest price levels for gold in recent years, and it signals a major shift in investor sentiment.
Why Is Gold Falling Amid Crisis?
While the world may be experiencing heightened geopolitical tensions, several factors are contributing to gold’s unexpected slump:
1. Declining Investment Demand
Citi Bank attributes the primary cause of the projected price drop to weakening investment demand. Gold exchange-traded funds (ETFs) have seen outflows, and private investors are exploring alternative assets like cryptocurrencies, stocks, and government bonds with higher yields.
2. Geopolitical Risk May Be Peaking
While geopolitical events typically drive demand for gold, many experts now believe that some of the most intense fears—such as expanded military conflicts or trade restrictions—are already priced into the market. If these risks de-escalate or stabilize, gold could lose its appeal as a panic-driven asset.
3. Easing Trade Restrictions
Recent developments in global trade negotiations suggest that some of the taxes and import tariffs that once added volatility to the market are being resolved. With smoother international commerce, the fear-driven buying of gold is declining.
4. Global Economic Growth
Another key reason for the bearish outlook is the improvement in global economic conditions. A stronger economy typically leads to higher interest rates and stronger currencies—two factors that weigh heavily on gold, which does not yield interest and becomes less attractive compared to other investments.
What Does This Mean for Investors and Buyers?
The market correction could present a unique opportunity. For those who have always wanted to invest in gold but were priced out during its highs, the coming months may offer an ideal entry point. However, timing will be key. Jumping in too early could mean catching the price before it hits bottom, while waiting too long might mean missing the low.
For long-term holders of gold, this might be a time to reassess portfolio strategies—whether to hold through the dip, diversify, or partially cash out.
🛒 Is Now the Right Time to Buy?
That depends on your financial goals:
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If you’re a short-term trader, gold’s downtrend might not be ideal unless you’re looking to short the commodity.
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For long-term holders, a dip like this could be a good time to accumulate, especially if you believe geopolitical instability will eventually push prices back up.
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If you’re simply looking for wealth preservation, it might be wise to wait and watch the trend over the next quarter before jumping in.
⚠️ Final Thoughts
Despite war, global uncertainty, and inflation—factors that traditionally push gold upward—the precious metal is currently moving in the opposite direction. With Citi Bank predicting further drops in 2026, it’s more important than ever to stay informed and make smart, research-driven financial decisions.
Gold may still shine in the long term, but in the short term, investors should be cautious, patient, and strategic.
