Citi: Maintains short-term gold price expectations of $4,500

The Zhitong Finance App learned that Citi released a research report saying that the benchmark situation shows that although the third quarter is a peak seasonal preparation season in history, India's gold imports will remain sluggish in the third quarter. The reason is that sufficient waste supply, consumer prudence, and local price discounts have curtailed the demand for fresh imports.

The bank maintains a short-term target price of $4,500 per ounce for 0 to 3 months, compared to $4,085 in spot. This target assumes an easing of tension in the Strait of Hormuz and the Federal Reserve becoming less hawkish; however, there are still many risks that may cause the price of gold to drop again in the short term, including major re-escalation, AI-driven risk reduction operations, and the Federal Reserve's continued hawkish stance.

According to the report, the Indian gold market follows a clear seasonal pattern. The first and third seasons are usually preparation seasons, and imports often exceed 100% of physical demand, as traders build up inventory before the festival and wedding season. This is usually followed by the inventory removal phase between the next quarter and the fourth quarter. Inventory is digested when retail demand is at its peak. In this context, the decline in gold imports in the next quarter was mainly seasonal rather than demand-driven. Indian traders tend to accumulate inventory when retail demand is weak and monetize this inventory during periods of strong consumer demand.