Pasofino Gold Limited (TSXV: VEIN)
Re-defining the Dugbe Gold Project
Gold markets are navigating conflicting signals as escalating Middle East conflicts collide with shifting monetary policy expectations, prompting Citigroup Inc (NYSE:C) to issue a contrarian bearish call while rivals maintain aggressive price targets.
Spot gold held steady near $3,390.81/oz after the Federal Reserve kept rates unchanged at 4.25%-4.5% on Wednesday, though updated dot plot projections revealed higher terminal rate expectations for 2026-2027.
Analysts note the central bank’s paradoxical stance—simultaneously cutting 2025 GDP growth forecasts (from 2.1% to 1.8%) while raising core PCE inflation projections (2.6% to 2.8%)—has intensified gold’s tug-of-war between inflation hedge and yieldless asset dynamics.
Amid heightened Middle East tensions, with Israel and Iran exchanging escalated strikes and the Trump administration reportedly authorizing (but not yet executing) attack plans on Iranian facilities, Citi analysts led by Max Layton forecast a retreat to $2,500-$2,700/oz by late 2026, based on following reasons:
Demand Erosion: Improving U.S. economic outlook dampens safe-haven bids
Policy Pivot: Fed rate cuts already priced into markets
Risk Premium Unwind: Reduced uncertainty around Trump’s trade/war policies
This contrasts sharply with Goldman Sachs’ maintained $3,700 year-end 2025 target, citing record central bank purchases (2024 net buying estimated at 1,100 tonnes), while Bank of America’s $4,000 call for 2026, noting rebounding gold ETF holdings over 3 consecutive months.
Citi’s probability-weighted framework suggests:
Base Case (60%): Prices consolidate above $3,000 next quarter before declining
Bull Case (20%): Geopolitical meltdown drives new records
Bear Case (20%): Swift tariff resolutions trigger selloffs
While the report primarily focused on gold’s macroeconomic trajectory, Citi analysts also highlighted strong bullish sentiment for other metals, notably aluminum and copper.
