Deutsche Bank has sharply cut its gold price forecasts by as much as 22% as investors cool on the metal’s rally. The bank’s analysts say worries about how long the Federal Reserve will keep rates high are weighing on sentiment. They also point to a decline in investment demand as a key reason for the downgrade.
In a note led by analyst Michael Hsueh, Deutsche Bank wrote that investor caution has grown as “US monetary policy repricing” pushes yields higher. Higher real rates usually hurt gold because the metal does not pay interest. Therefore, the bank now sees less support from macro traders who previously bought gold as an easy hedge.
New God Price Targets for Q3 and Q4
The bank’s new forecast for gold is now roughly $4,300 an ounce in the third quarter, down more than 20% from its previous forecast. Deutsche Bank decreased its projection to $4,800 for the fourth quarter, down around 17%. Those levels are still well above current market pricing but are a marked turn down from earlier positive views.
Meanwhile, the bank maintains a wider 2026 average prediction in the region of 4,450 dollars per ounce, with a probable range of 3,950 to 4,950 dollars. Analysts think the new quarterly projections better reflect recent price activity and the risk of further Fed tightening. However, they see potential for rallies if conditions become more favorable later in the cycle.
Deutsche Bank stresses that Federal Reserve policy is now the primary driver of gold price swings. In its scenario analysis, the bank warns that three or four additional rate hikes could push prices toward 3,800 dollars per ounce. However, it also says a steady Fed with no further hikes could allow bullion to climb back toward the upper end of its range.
At the same time, ETF investors continue selling, removing another pillar of support. Deutsche Bank notes that gold ETFs have seen persistent outflows, while futures open interest has dropped to multi-year lows. According to the bank, gold now looks “vulnerable until either the Fed pivots or physical demand re-emerges to support prices.”
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