Deutsche Bank has lowered its gold price forecast by 22%. What can we expect from the precious metals market?

Deutsche Bank has lowered its gold price forecasts by nearly 22% amid growing concerns about the future course of U.S. monetary policy and a decline in investor demand for the precious metal, according to Bloomberg.

In the third quarter of 2026, the price of gold is expected to reach $4,300, which is more than one-fifth lower than Deutsche Bank’s previous forecast, according to the bank’s analyst Michael Xue. The forecast for the fourth quarter has been lowered by 17% to $4,800 per ounce. However, despite a noticeable decline in optimism, both revised targets still imply a 4% and 16% increase, respectively, from current levels.

“A reassessment of expectations regarding the Fed’s actions, coupled with solid U.S. macroeconomic data, played a major role in the decline in gold prices,” Xue explained. The bank’s fourth-quarter target is based on the view that the U.S. central bank will continue to keep rates at their current level, — however, in the event of a series of rate hikes—three to four times—the price of gold could fall to around $3,800, the analyst added.

At its most recent meeting, the Fed left interest rates unchanged; however, opinions among Fed officials regarding the future trajectory of U.S. monetary policy were divided: nine governors expect at least one rate hike by the end of the year, another nine expect rates to remain unchanged or be cut, and the new chairman, Kevin Warsh, abstained from voting altogether.

Ongoing selling from gold-backed exchange-traded funds (ETFs) has shown that the precious metal’s usual support is currently absent, a Deutsche Bank analyst noted. The domestic discount on gold in China relative to Comex prices also indicates that imports will not serve as a supportive factor for gold, he added. “The only support [for the precious metal] that [so far] remains solid is demand [for gold] from central banks,” Xue said, emphasizing that Deutsche Bank expects “this to [continue] for some time yet.”

Spot gold fell 1.7% on Tuesday, June 23, to just over $4,100 per ounce, while silver dropped 4.4%. After reaching an all-time high of around $5,600 per ounce in late January, gold prices have fallen by 26%.

Deutsche Bank’s downgrade of its gold outlook followed a similar move by Goldman Sachs. Last week, the investment bank cut its year-end gold price forecast by $500 to $4,900 per ounce. The bank’s analysts attributed their position, among other things, to the fact that they no longer expect the U.S. central bank to cut interest rates this year.

At the same time, according to a World Gold Council survey of central bank representatives, a record proportion of regulators worldwide expect to increase their gold reserves in the coming year. This is a sign that one of the key forces behind the precious metal’s record rally at the beginning of the year remains in place, despite the recent decline in prices, Bloomberg reported on June 16.

This article was AI-translated and verified by a human editor