Looking for a sign to put off buying an engagement ring? This just might be it.

• Citigroup predicts that gold prices will drop below $3,000 per troy ounce.
• Analysts said they foresee the metal will return to as low as $2,500 by the second half of 2026.
• The expectation is based on Federal Reserve rate cuts and slowing investment demand.

If you're in the market for some new gold jewelry, then it may be well worth waiting until next year.

According to analysts at Citigroup, gold prices may start to sink from record highs and drop as much as 25% by the end of 2026.

The New York-headquartered investment bank is expecting the precious metal to slump below $3,000 per troy ounce in late 2025 into 2026 owing to rate cuts by the Federal Reserve, slowing investment demand, and strengthening global economic prospects.

"Our work suggests that gold returns to about $2,500 to $2,700 an ounce by the second half of 2026," the strategists wrote in a report.

Gold prices were $3,385 per ounce as of roughly 8:30 a.m. ET on Wednesday, up close to 30% so far in 2025, and almost half since this time last year.

The jump in value was driven by increased gold holdings by central banks, uncertainty regarding tariffs, the conflict in the Middle East, and concerns over a global economic slowdown.

According to a European Central Bank report published last week, reserve banks purchased over 1,000 metric tons of the yellow metal in 2024, double the average amount bought in the previous decade.

Gold's rise has also been fuelled by the "Sell America" trade, where investors sold off US Treasury bonds and US stocks at record high levels.

The analysts said in the report that a decline in demand for the precious metal beginning in the last quarter of 2025 could come from "any modest improvement in global growth confidence as the stimulatory US budget passes and starts to take affect, as President Trump's trade and other economic policies become less bearish as the US midterms come into sight, and as the Fed cut rates towards neutral."

In Citigroup's base case, with 60% probability, gold prices will consolidate around $3,100 to $3,500 per ounce in the third quarter of this year before starting to decline below $3,000 by late 2025 or early 2026.

The most bullish scenario, with odds at 20%, sees a record high above $3,500 in the next quarter on fears regarding tariffs, geopolitical tensions, and stagflation. The worst-case scenario for the metal, also with 20% probability, involves a sell-off due to quick tariff rate resolutions, geopolitical de-escalation, and the US economy remaining resilient.

Get the latest Gold price here.