Investing.com -- Citi has lifted its three-month gold price target to $3,200 per ounce, up from a previous estimate of $3,000 in a note Thursday.

The bank highlighted strong central bank demand, geopolitical uncertainty, and rising investment flows.

"Gold prices have rallied by 50% over the past year to over $3,000/oz on the back of strong central bank demand (led by China) and increasingly strong demand for hedges against downside risks related to the impact of tariffs on global growth and asset markets," Citi wrote.

The bank continues to recommend buying into any major dip, as "the gold bull market looks set to continue with tariff and geopolitical uncertainty supporting EM official sector gold demand."

While $3,000 per ounce is a key psychological level that may trigger some profit-taking, Citi believes broader macro factors will keep investment demand elevated.

Looking ahead, Citi maintains its $3,000 per ounce price target for gold over the next six to twelve months but sees potential upside in a bull-case scenario where the U.S. economy deteriorates.

"In our bull case (30% probability), we see gold price reaching $3,500/oz by year-end, underpinned by much higher hedging/investment demand on fears of US hard landing/stagflation," wrote the bank.

Even in a bear-case scenario, where the U.S. economy remains resilient, Citi expects gold to hold above $2,500-2,600 per ounce, supported by continued central bank and retail buying.

Citi’s longer-term outlook points to gold remaining above $3,000 per ounce in 2025, with investment demand as a share of mine supply expected to stay above 90% for the rest of the year.