Deutsche Bank has raised its gold price forecast for 2026, citing a rare combination of structural and technical factors driving the metal beyond historical trends. The bank now expects gold to reach $4,450 per ounce in 2026, up from its previous projection of $4,000 per ounce. Additionally, it forecasts a wider trading range between $3,950 and $4,950 per ounce.
Analysts note that gold’s recent performance is increasingly diverging from long-standing norms. Its outperformance against the US dollar is nearing a record level set only last year. The projected trading range for 2025 is the widest since 1980, indicating heightened two-way volatility and sustained structural demand.
Several factors support Deutsche Bank’s bullish outlook. Investor flows have stabilised, technical indicators suggest that previous positioning clean-outs have ended, and third-quarter supply-demand figures show central banks remain significant net buyers of gold. Structural demand is considered “inelastic,” with ongoing reserve-manager accumulation and ETF allocations diverting supply away from jewellery markets. This is occurring at a time when total demand continues to outpace available supply.
However, risks remain. Gold’s tendency to move in line with risk assets means that a deeper equity market correction could negatively impact prices. Deutsche Bank’s central forecast also predicts less Federal Reserve easing in 2026 than the markets currently expect (a 50 basis point cut versus a 93 basis point cut), which could reduce bullish momentum. Furthermore, a negotiated end to the Russia-Ukraine conflict might temporarily depress gold prices, and reserve managers may eventually slow their buying pace. Historically, sharp increases in real gold prices have often been followed by significant corrections.
For forex traders, these insights highlight the potential for greater volatility and the influence of broader economic and geopolitical factors on gold prices. Monitoring central bank policies, risk sentiment, and geopolitical developments will be crucial when trading gold-related currency pairs.
Original Source: Eamonn Sheridan of investinglive.com
