Has Gold’s Worst Moment Passed? Barclays Calls for “Bottom Fishing”, Citi Raises Target Price
Source: Wallstreet Insights
Barclays and Citibank go bullish on the same day! After a deep 25% correction in gold, an imminent US-Iran memorandum of understanding is about to be signed, oil price expectations have been completely reversed, and inflationary headwinds are fading. Citibank raised its 3-month target to $4,500, and its 6- to 12-month bullish target to $5,000; Barclays asserts: This is a “price reset,” not the end of the bull market.
After a prolonged 2.5-month and 20%-25% deep pullback, gold now finds itself at a key turning point.
On June 15, both Barclays and Citibank made public statements: the former explicitly called for “it’s time to increase gold exposure,” while the latter raised the 3-month gold price target from $4,000/oz to $4,500/oz. Their consensus:
The core catalyst triggering this new wave of optimism is the announcement by the US and Iran that a memorandum of understanding (MoU) will be officially signed this Friday. According to Citi Research, this event is expected to restore Hormuz Strait trade flows to almost normal by mid to late July, allowing the oil market to refocus on weak supply and demand fundamentals—Citibank revised its Brent crude oil forecasts for Q3 2026 to 2027 to $75, $70, and $65 per barrel respectively (previously $110, $90, and $80).
Citibank believes that as geopolitical tensions ease, inflationary pressures will likely recede, and the key macro headwinds previously weighing on gold may gradually fade. Citi maintains its bullish 6- to 12-month forecast of $5,000/oz for gold, but cautions that the gold price will still face considerable volatility risk.
Barclays, using exchange rates, equity strategies, and derivatives, conducted a full post-mortem of the downturn. According to the bank, the twin pressures of a roughly 2.5% strengthening dollar and a more than 10% rally in the S&P 500, combined with crowded long positions being unwound, triggered this sharp correction.
US-Iran MoU: Key catalyst, oil price expectations fully reversed
According to Citi Research, the breakthrough in US-Iran negotiations is viewed as one of the most significant events in this year’s commodities markets. Citi notes that while the market has digested the news of the MoU, it hasn’t fully priced in the scenario of a sustained mid-term recovery in Hormuz Strait flows—
Citi’s base case (60% probability): After the formal signing of the MoU, negotiations continue, the oil market will see a paper supply surplus of about 4 million barrels per day by 2027, and crude oil is likely to fall below $70 per barrel. Citi also sets out two tail-risk scenarios: a bull case (20% probability) where conflict flares up again after a brief truce, and a bear case (20%) where UAE, Saudi Arabia, and Iran quickly ramp up production alongside a Russia-Ukraine ceasefire.
Barclays: This round is a ‘reset’, not the finale
From a valuation perspective, the Barclays team states,
On the options market front, Barclays’ derivatives strategy team says market positioning and options pricing indicators have normalized significantly from early-year extremes.
Most noteworthy: Implied volatility on calls has reversed from deep premiums earlier this year to near-decade lows, while put skew has climbed to decade highs due to reviving hedging demand. This structural shift means,
Long-tail inflation effect: The strongest structural support for gold prices
Barclays regards US inflation as the dominant variable for gold’s medium- and long-term trends.
According to their model,
From a broader structural perspective, Barclays believes that multiple long-term positives remain intact.
Central bank gold buying data likewise shows structurally solid demand.
According to the latest data from the World Gold Council (WGC), central bank gold purchases (by ounce) grew 17% quarter-on-quarter in Q1 2026, while in dollar terms, high gold prices resulted in a 38% jump quarter-on-quarter. In Q1, the main buyers were the central banks of Poland and Uzbekistan, while the world's largest stablecoin issuer, Tether, continued to increase its holdings, purchasing 12.6 tons and raising total reserves to 154 tons—ranking it 4th globally, surpassing most major central banks. Turkey and Russia, meanwhile, were large net sellers, driven by demand to stabilize their own currencies. Barclays believes that as geopolitical tensions ease, emerging market central banks that previously sold gold reserves are likely to resume accumulation.
Editor: Zhu Henan
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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