Gold prices could face further downside over the next three months, with Citigroup lowering its near-term price target for the precious metal. The brokerage has cut its three-month gold target to $4,000 per ounce from $4,300. However, Citi maintained its six- to 12-month target of $5,000 per ounce, signalling that it remains constructive on the longer-term outlook despite near-term headwinds.
Spot gold was trading at $4,331.72 per ounce in London on Tuesday, holding above the $4,300 mark. The metal found support from softer crude oil prices and easing concerns over energy-driven inflation after tensions in West Asia moderated following a ceasefire agreement between Iran and Israel.
However, gold's gains have been limited by a stronger US dollar and rising Treasury yields. Robust US labour market data has reinforced expectations that the Federal Reserve could keep interest rates elevated for longer, with markets now pricing in roughly a 70% probability of a rate hike by December.
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According to Kotak Securities, stronger-than-expected US economic data continues to strengthen the case for a tighter monetary policy stance, keeping pressure on precious metals. Investors are now closely tracking upcoming US inflation readings and signals from the Federal Open Market Committee (FOMC) for further clarity on the interest-rate trajectory.
Kotak Securities has identified key support levels for spot gold at $4,296.5, $4,274.8 and $4,204.8 per ounce. On the upside, resistance is seen at $4,366.5, followed by $4,388.2 and $4,458.2.
Silver, meanwhile, has shown greater resilience. Spot silver climbed 0.7% to $68.64 per ounce, supported by improving risk sentiment. Platinum and palladium also advanced, while the Bloomberg Dollar Spot Index edged 0.1% lower.
Despite the recent gains, Kotak Securities cautioned that silver remains vulnerable if support levels are breached. The brokerage sees support for spot silver at $67.18, followed by $66.43 and $64.01 per ounce. Resistance levels are placed at $69.60, $70.35 and $72.77.
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