Deutsche Bank analysts have revised upward their forecast for gold in 2026, citing recent price gains and the potential for U.S. interest rate cuts, along with ongoing concerns over the Federal Reserve’s independence.
In a client note, the team led by Michael Hsueh set their new average price projection for 2026 at $4,000 per troy ounce, up from the previous $3,700/oz forecast. The adjustment follows spot gold reaching $3,700 on Tuesday, driven largely by market expectations that the Fed will reduce rates by at least 25 basis points at the conclusion of its two-day policy meeting this week. Lower rates generally support gold by reducing opportunity costs, weakening the U.S. dollar, and enhancing the metal’s appeal as a hedge against inflation and a safe-haven asset.
Analysts highlighted that investor sentiment has also been influenced by concerns over political interference in the Fed’s policymaking. President Donald Trump has publicly criticized the central bank for moving too slowly to cut rates, targeting Chair Jerome Powell and attempting to remove Fed Governor Lisa Cook over alleged property transactions. A federal appeals court recently blocked Trump’s effort to fire Cook, and the White House may appeal the decision to the Supreme Court.
According to Deutsche Bank, the ongoing questions around Fed independence and shifts in the composition of the Federal Open Market Committee are adding uncertainty about how monetary policy adjustments might be implemented in 2026.
On the demand side, official purchases of gold continue to be robust, with China playing a major role. The bank noted that China’s net imports of gold through Hong Kong jumped 126.8% in July from June, and its central bank has been steadily adding to reserves. Globally, total gold demand—including over-the-counter trading—rose 3% year-on-year in the second quarter to 1,248.8 metric tons, while investment demand surged 78% compared to the previous year.
Still, Deutsche Bank pointed to potential headwinds for gold, such as strong equity market performance, greater clarity on Trump’s trade policies, an immigration crackdown affecting U.S. labor needs, and the possibility that the Fed may not cut rates further in 2026. The analysts also noted that historically, gold has often underperformed in the fourth quarter.
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