Deutsche Bank Lowers Gold Forecast, Sees Bullion at $4,300 in Q3 and $4,800 by End-2026

Deutsche Bank has revised down its gold price outlook for the second half of 2026, reflecting a shift in its view of the precious metal's trajectory amid changing expectations for U.S. monetary policy.

The bank now expects gold to average $4,300 per ounce in the third quarter of 2026, before rising to $4,800 per ounce in the fourth quarter, both below its previous projections, which had anticipated a stronger rally following the record highs reached earlier this year.

The revision underscores a significant change in the bank's assessment of the market. According to Deutsche Bank, the primary driver of gold prices is no longer geopolitical tensions or fluctuations in oil prices, but rather the market's repricing of expectations for U.S. Federal Reserve policy. As investors increasingly anticipate interest rates remaining elevated for longer—or even rising further if inflation proves persistent—the appeal of non-yielding assets such as gold has weakened.

Bank analysts noted that since mid-May, gold has gradually lost its traditional correlation with oil prices and has become increasingly sensitive to changes in interest rate expectations. As a result, any shift in the outlook for Federal Reserve policy is now likely to have a more immediate impact on bullion prices than geopolitical developments alone.

Despite lowering its forecasts, Deutsche Bank continues to maintain a constructive medium-term outlook for gold. Its projection of $4,800 per ounce by the fourth quarter still implies upside from current levels, although the expected recovery is likely to be slower and more volatile than previously anticipated.

At the same time, the bank warned of a more bearish scenario in which gold could decline to around $3,800 per ounce if financial markets begin pricing in three to four additional U.S. interest rate hikes. Higher borrowing costs would strengthen the U.S. dollar and lift Treasury yields, increasing the opportunity cost of holding gold and weighing on investment demand.

The report also highlighted continued outflows from gold-backed exchange-traded funds (ETFs), along with softer physical demand across key Asian markets, as additional factors that could limit gold's ability to regain upward momentum in the coming months.

Market analysts believe Deutsche Bank's revised outlook reflects a broader shift among global financial institutions. Earlier this year, investors largely expected the Federal Reserve to begin cutting interest rates. However, stronger-than-expected economic data and persistent inflation have prompted markets to reassess that view, leading several major investment banks to revise their precious metals forecasts.

Nevertheless, gold continues to benefit from several long-term supportive factors, including sustained purchases by central banks, ongoing efforts to diversify foreign exchange reserves away from the U.S. dollar, and continued geopolitical and economic uncertainty. These structural drivers are expected to help prevent a prolonged or severe decline in prices.

Overall, Deutsche Bank's latest outlook suggests that the gold market has entered a new phase in which price movements will be driven primarily by U.S. economic data, Federal Reserve policy decisions, and the direction of the U.S. dollar, rather than by geopolitical developments alone.