Gold At Risk Of Major Pullback: Citi Predicts Shock 25% Crash By 2026 - Newmont (NYSE:NEM), VanEck Gold Miners ETF (ARCA:GDX)

Citigroup has predicted a potential 25% slump in gold prices by the end of next year, signaling a possible halt to the metal’s unprecedented rally.

What Happened: Despite gold’s current record-breaking performance, Citi’s global commodity team anticipates a substantial decline in price by the second half of 2026. The team, led by Maximilian Layton, predicts that gold prices could fall to the range of $2,500 to $2,700 by the end of next year, reported MarketWatch.

Gold is currently trading near all-time highs, both in dollar terms and when adjusted for inflation. The metal’s appeal as a hedge and safe-haven asset has led to a surge in demand, with central banks and investors alike showing strong interest.

However, Citi believes that this heightened demand has reached its peak and will soon start to wane.

The bank expects investment demand for gold to decline in late 2025 and into 2026, as the negative headlines that have shaped the 2025 trading environment begin to subside. Citi also foresees improved risk sentiment following the signing of trade agreements and the passage of the One Big, Beautiful Bill Act. This will also be around the time the U.S. mid-terms and President Donald Trump‘s popularity come into focus.

Citi indicates that the Fed has significant scope to shift from a restrictive to a more neutral monetary policy, which could boost global growth sentiment and weaken the safe-haven appeal of gold. According to their estimates, a 100 basis point decrease in interest rates typically lowers forward gold prices by $200 per ounce.

Why It Matters: The recent surge in gold prices has prompted a rush of investors into gold ETFs, with many seeking to capitalize on the metal’s impressive performance. However, questions have been raised about whether these ETFs are truly designed to provide a hedge during geopolitical crises.

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Gold’s remarkable rally in 2025 has been driven by various factors, including safe-haven demand following geopolitical events, such as Israel’s airstrikes on Iran’s nuclear facilities. This surge in demand has led to gold surpassing the euro to become the second-largest reserve asset globally, according to the European Central Bank (ECB).

Meanwhile, Economist and gold advocate Peter Schiff highlighted renewed bullish momentum in the gold market on Friday via posts on X, noting that the outperformance of gold mining stocks compared to gold suggests a positive shift in investor sentiment, citing VanEck Gold Miners ETF GDX as an instance.

Over the past month, VanEck Gold Miners ETF surged 13.12%. Meanwhile, shares of gold miners, Wheaton Precious Metals Corp WPM and Newmont Corporation NEM soared 14.35% and 14.12%, respectively, as per Benzinga Pro.