Deutsche Bank Predicts Gold to Reach $4,000 per Ounce in 2026

Global gold prices have continued their historic ascent, touching new record levels above $3,700 per ounce. Meanwhile, the German bank, Deutsche Bank, has raised its forecast for the precious metal's price in 2026 to $4,000, up from its previous estimate of $3,700.

Reasons for the Upgraded Forecast

In a research report, the bank explained that its forecast was driven by three key factors:

Strong demand from central banks around the world, which have increased their gold purchases as a hedge against the risks of fiat currencies.

The likelihood of a weaker U.S. dollar over the next two years, amid continued loose monetary policies and growing economic pressures.

Anticipation of the U.S. Federal Reserve resuming its interest rate-cutting cycle, which reduces the appeal of bonds and increases demand for gold as a non-yielding asset.

Gold at Historic Levels

According to Reuters and Bloomberg data, spot gold prices recently hit around $3,727 per ounce, while December futures contracts rose to $3,760 per ounce.

These jumps come as investors' bets are increasing that the Fed will take a more cautious path, with the possibility of further interest rate cuts before the end of the current year.

The Impact of Geopolitics

The economic factor alone has not been the main driver for gold. Escalating geopolitical tensions are playing a prominent role in solidifying its status as a safe haven, due to the ongoing Russia-Ukraine war and the escalating conflict in the Middle East, with their repercussions on energy markets and supply chains.

All of this supports investment flows into the precious metal and increases the likelihood of it stabilizing at high levels for a longer period.

Market and Investor Outlook

Although the Fed cut its benchmark interest rate for the first time since last December and indicated the possibility of two additional cuts before the end of 2025, investors are betting on a faster and deeper pace of monetary easing. They expect short-term interest rates to fall from the current 4.25% to below 3% by 2026.

This divergence between investor expectations and the Fed's official rhetoric reinforces market volatility, but it puts gold in a strong position as the safest asset and the one least linked to political and monetary fluctuations.

With Deutsche Bank raising its forecast to $4,000 per ounce, it's confirmed that gold is no longer just a traditional hedging tool but has become a key component in the strategies of central banks and global investors. Amid a mix of easy monetary policies and geopolitical turmoil, the yellow metal appears to be steadily moving towards solidifying its position as the most strategic asset in the global financial system in the coming years.