Deutsche Bank slashes gold forecasts by up to 22% on fading demand

Deutsche Bank has sharply lowered its gold price forecasts, cutting them by as much as 22% as investment demand for the precious metal wanes amid cautious US monetary policy.

The bank now expects gold to trade at $4,300 an ounce in the third quarter, more than a fifth below its prior forecast, and $4,800 in the fourth quarter, down 17% from the earlier view. Those targets still suggest possible upside from current levels below $4,100, but the message is less aggressive than before. The revision follows a similar move by Goldman Sachs, which reduced its year-end gold forecast by $500. The cuts reflect growing wariness among investors about the direction of US interest rates and the fading of the investment demand that had supported gold's rally.

For gold and precious metals traders, the forecast downgrades signal that major financial institutions are reassessing the metal's outlook in a higher-for-longer rate environment. Gold, which does not yield interest, typically faces headwinds when real yields rise or when the US dollar strengthens. The recent pullback in gold prices from record highs has already tested key support levels. For the latest real-time gold quotes, traders can check NowPrice's live gold price tracker to monitor moves as they happen.

Looking ahead, the market will focus on upcoming US economic data, particularly inflation readings and Federal Reserve commentary, for clues on the pace of rate cuts. A more hawkish Fed could further pressure gold, while any signs of easing could reignite demand. Traders should also watch for shifts in ETF holdings and central bank buying patterns, which have been key drivers of gold's long-term trend.