Deutsche Bank’s analysis suggests gold’s recent pullback may already have run its course, with the bank pointing to a floor closer to $3,900/oz rather than the deeper retracement some technical models imply.
That reading, paired with a fair value estimate still comfortably above spot, points to limited near-term downside risk and reinforces the bank’s existing bullish stance into year-end
Traders parsing the note are likely to focus on the gap between model-implied fair value and the bank’s official forecast, which suggests scope for gold to grind higher even after its historic run. The report also flags a longer-term valuation risk, with adjusted relative-price ratios implying a much lower equilibrium level near $2,600/oz, a divergence that could resurface in market debate if the current rally loses momentum. — Deutsche Bank argues gold’s correction has likely bottomed near $3,900/oz and reaffirms its $4,600/oz year-end forecast. Summary: Deutsche Bank identifies the current gold rally, dated from August 2024, as one of only five “explosive” price episodes in data going back to 1975, using a statistical filtering method that strips out isolated one-month readings.
The bank examines whether gold’s rally is still intact by looking at the question from three separate angles. A regression of gold prices against the bank’s statistical test for explosive price behaviour suggests both the rally’s upward extension and its recent pullback have been more muted than in past episodes, with gold potentially bottoming around $3,900/oz rather than falling toward a regression-implied $3,700/oz. Deutsche Bank’s fair value model, once adjustments for outsized official sector demand and real interest rate effects are unwound, still points to a fair value near $4,700/oz by year-end.