(Reuters) - Citi Research raised its three-month forecast for gold (GC=F) prices, citing possible further U.S. labor market deterioration, interest rate cuts by the Federal Reserve, and physical and ETF buying, it said in a note on Monday.

The bank upgraded its three-month gold price view to $2,800 per ounce from $2,700 previously, adding that its 6 to 12-month forecast is $3,000.

It revised its 6 to 12-month forecast for silver (SI=F) prices upward to $40 per ounce from $38 per ounce.

"We note that gold and silver have performed extremely well despite weakening China retail physical demand and rising U.S. interest rates since the Fed cut 50 (basis points) and payrolls beat last month," the note said.

Gold should also rise in the scenario that oil spikes on near-term Middle East escalation, it added.

Gold surged to a record high on Monday while silver struck a near 12-year peak, as growing uncertainties surrounding the U.S. presidential election and the Middle East war added to gold's rally already fueled by expectations of interest rates easing.

Citi said it remains neutral-bullish on platinum (PL=F) with a three-month point price target of $1,025 per ounce and a 6 to 12-month target of $1,100 per ounce.

It added that it leans bearish palladium (PA=F) following the recent price gain with a three-month target of $1,000 per ounce and a 6 to 12-month target of $900 per ounce.

Citi also said that oil (CL=F, BZ=F) fundamentals point to $60 per barrel average prices in 2025, but that the potential for very near-term geopolitical escalation in the Middle East is high.

(Reporting by Anjana Anil in Bengaluru; Editing by Aurora Ellis)