URGENT UPDATE: Deutsche Bank has just announced a significant increase in its gold price forecast, projecting prices to soar between $3,950 and $4,950 by 2026. This bold prediction highlights a surge in central bank demand, indicating a transformative shift in the gold market.
The bank’s latest analysis cites robust third quarter supply-demand data as evidence of ongoing central bank purchases. Deutsche Bank states, “The positive structural picture shows inelastic demand from central banks and ETF investment diverting supply from the jewellery market.” This trend is expected to drive prices higher as overall demand continues to outpace supply.
The implications of this forecast are profound. A deeper equity market correction could negatively impact gold prices, especially given Deutsche Bank’s view of a less aggressive Fed easing than currently anticipated in 2026. Specifically, they predict a reduction of only 50 basis points in interest rates compared to the 93 basis points the market expects.
Moreover, a negotiated end to the ongoing Russia-Ukraine conflict could serve as a temporary setback for gold prices. However, in the broader context, reserve managers may slow their buying pace, leading to potential corrections in gold prices despite current bullish sentiments.
Deutsche Bank’s optimistic outlook on gold prices is also expected to have spillover effects on other precious metals. The bank notes that “consecutive years of undersupply enables silver, platinum, and palladium to participate more fully in gold’s strength.” With elevated lease rates indicating physical scarcity, many industrial users are opting to lease rather than own these metals.
Looking ahead, Deutsche Bank forecasts that supply-demand dynamics will remain in deficit for silver and platinum next year. Meanwhile, palladium is expected to be balanced in supply and demand. This ongoing scarcity and increased demand could significantly impact industrial sectors dependent on these metals.
This urgent development in the gold market not only highlights the financial sector’s response to global events but also signals potential investment shifts for both institutional and retail investors. As the landscape evolves, market watchers and investors alike will need to stay informed on these trends.
Stay tuned as we continue to monitor this developing story and its implications for the global economy.
