Another major bank remains bullish! Deutsche Bank raises gold price forecast to $4,000

According to the Zhitong Finance APP, Deutsche Bank believes that gold still has room for further increases, with the bank forecasting an average gold price of $4,000 per ounce next year. Gold is currently experiencing its strongest upward trend in decades, having risen 40% so far this year. This increase is the most significant annual rise since 1979, when global investors flocked to the precious metals market due to concerns about inflation.

Deutsche Bank analyst Michael Hsueh stated, "As gold prices have reached our average forecast for 2026—$3,700 per ounce—we believe the likelihood of further increases is greater compared to a corrective pullback to its financial fair value."

Hsueh believes that the foreign exchange and interest rate environment remains favorable for further increases in gold prices, while positioning indicators have not become excessively inflated. Hsueh noted, "Although gold appears relatively expensive compared to its fair value, we believe this is primarily due to strong official demand, which we expect to continue."

Unlike previous crises, current demand seems to be driven by factors such as uncertainty in U.S. government policies, concerns about the dollar, and geopolitical instability. Market volatility has been exacerbated by Trump's tariff policies and his repeated criticisms of the Federal Reserve. Additionally, geopolitical conflicts have left the market in a state of instability, attracting a wide range of investors from retirees to hedge funds.

Hsueh believes that central bank purchases (especially from the People's Bank of China) provide support for further market increases, with their scale approximately double the average scale from 2011 to 2021.

Deutsche Bank also expects the Federal Reserve's easing cycle to restart, with its economists believing there is a risk of downward revision to the baseline forecast—the bank expects the Federal Reserve to maintain interest rates unchanged in 2026 after three rate cuts in 2025. Analysts stated, "The independence of the Federal Reserve faces ongoing challenges, and changes in the composition of the Federal Open Market Committee may lead to uncertainty regarding the Fed's response mechanism next year."

Furthermore, the high-yield status of the dollar is no longer present, prompting foreign investors to hedge against U.S. assets.

In addition to Deutsche Bank, other major Wall Street firms have also raised their gold price forecasts following recent record highs. Previously, UBS raised its gold price forecast to $3,800 per ounce by the end of 2025 and $3,900 by mid-2026, citing expectations that the Federal Reserve will resume rate cuts amid weak U.S. labor data.

Additionally, JP Morgan expects spot gold prices to break the $4,000 per ounce mark in the first quarter of 2026. Goldman Sachs has even proposed an aggressive forecast: if the private sector converts 1% of its U.S. Treasury holdings into gold, gold prices could approach $5,000.

Hsueh also pointed out several risk factors, including strong stock performance, immigration policies limiting U.S. labor supply, and seasonal influences. Generally speaking, the fourth quarter is a period when gold prices tend to perform poorly. Another potential risk factor could be positive outcomes from U.S. trade negotiations, which would reduce uncertainty for corporate investments Deutsche Bank analysts have raised their silver price forecast from $40 per ounce to $45 per ounce