Investing.com -- Citi has revised its short-term price target for gold back to $3,500 per ounce, citing the latest tariff escalation and high geopolitical risks.

The bank, in a note on Sunday, said it expects gold prices to consolidate between $3,100 and $3,500 per ounce, up from its May 12 estimate of $3,000 to $3,300 per ounce.

Despite the upgrade, Citi maintains its cautious stance on gold in the long term.

The bank identifies two key reasons for this: the potential for growth and related equity risks to unwind as the U.S. midterms approach and the Federal Reserve cuts rates, and the fact that households are now holding the most gold they have in half a century.

Citi’s short-term price targets for platinum and palladium remain unchanged at $1,050 per ounce and $900 per ounce, respectively.

The recent platinum rally is seen as headline-driven, and Citi believes a sustainable upside requires a real improvement in end-use demand. The bank views the palladium rally as another opportunity for producer hedging and speculator short selling.

The bank raised its gold price target back to $3,500 per ounce in response to Friday’s fresh U.S. threat of a 50% tariff against the European Union starting in June.

Later on Sunday, U.S. President Donald Trump agreed to EU’s request to extend his proposed 50% tariffs against the bloc by another month, until early July.

Citi has been bullish on gold since 2023, and it first raised its target to $3,500 per ounce in April 2025. This record gold price was surpassed on April 22 due to concerns about the independence of the Federal Reserve.

As trade tensions started to de-escalate, Citi called for a period of consolidation for gold prices and moderated its short-term target to $3,150 per ounce, a price reached on May 15.

Citi expects gold prices to continue to consolidate around current levels in the second half of 2025. The bank anticipates strong range-trading opportunities between $3,100 per ounce and $3,500 per ounce.

Gold demand is robust, with approximately 0.5% of world GDP currently being spent on gold, the highest in half a century of data. Citi attributes this to a combination of high levels of uncertainty boosting investment demand and the absence of an actual recession, particularly in India or China, supporting jewelry demand despite high prices.