Gold & Silver Surge: Citi's Bullish 2026 Forecast

Gold & Silver Soar: Citi's Bullish 2026 Outlook

In a note to clients, Citi strategists expressed optimism about gold and silver, as well as copper and aluminum. They noted that expectations of a new, more dovish Federal Reserve leadership (anticipated in May-June 2026), declining US real interest rates, and a weaker US dollar will drive a further expansion of the gold and silver bull market, eventually extending to copper and aluminum in 2026.

Factors driving precious metal prices include cyclical elements such as persistent labor market weakness, concerns about US and global growth due to tariffs, as well as structural factors like concerns about US debt and a weakening dollar. Citi also anticipates that stimulus from the 'Build Back Better' Act will benefit households and drive capital expenditure investment in the first half of 2026, boosting US and global growth.

The Citi team suggests that 'almost all conditions are in place for a gold bull market' and advises buying on dips, with a future price target of $3,800 per ounce in the next three months, expecting prices to peak in the first quarter of next year. In a stagflation scenario and growing concerns about the Fed's independence, they anticipate gold prices reaching $4,000 per ounce in the coming months; in a scenario of slow economic growth and easing geopolitical tensions, prices may fall to $3,400 per ounce.

Aluminum and Copper Outlook

For aluminum, strategists are 'very bullish' on prices in the next six to thirty-six months, describing any pullback as a 'strong long-term buying opportunity.' They point out that the aluminum industry is closely tied to AI data centers and robotics, and that competition for electricity in these future-oriented fields is driving demand for aluminum (as aluminum production is highly dependent on electricity), while China is capping aluminum production capacity.

For copper, they anticipate a base case price of $12,000 per metric ton in the next six to twelve months (implying a 20% increase), and an optimistic price of $14,000 per metric ton. Although they are neutral on copper prices in the fourth quarter of 2025, they expect prices to benefit from the structural energy transition and AI trends; and given the dovish expectations for the Fed (especially after May 2026) and the associated decline in US real interest rates, copper prices are highly correlated with the anticipated recovery in US and global growth in 2026.

Citi had warned in June that gold prices might face a decline in 2026. But in their latest forecast, the institution has walked back some of their negative views. The institution has raised its gold price forecast for the first quarter of 2026 from $2,900 per ounce to $3,700 per ounce; and expects prices to fall to $2,800 per ounce by the fourth quarter of 2026, slightly higher than its previous forecast of $2,600 per ounce.

Beyond the specific price targets, it's important to understand the broader context. The demand for metals, particularly those used in green technologies (like copper in electric vehicles and wind turbines) and advanced computing (like aluminum in data centers), is expected to grow significantly in the coming years. While Citi's forecasts offer a specific timeline, the underlying trends suggest a long-term upward pressure on prices for these commodities. This creates both opportunities and risks for investors, requiring careful consideration of market dynamics and macroeconomic factors.