The recent surge in gold prices may be approaching its peak momentum, according to analysts at Deutsche Bank, who note that the September–October rally has already lasted 29 trading sessions — well above the historical median of 18 to 19 days.
Analyst Michael Hsueh explained that this rally has combined a strong directional trend with unusually low volatility, conditions that likely favored trend-following strategies earlier in the move. But a recent uptick in realized volatility suggests that this supportive backdrop may be fading.
Hsueh clarified that he does not see this as a sign of an imminent downturn. He cited the June–August period as a precedent, when gold consolidated without undergoing a meaningful correction. He also highlighted that fair value models have increased by $260–290 per ounce since early August, creating a buffer even as spot prices have surged by nearly $700.
Another notable factor this time around is the strength of white metals. Silver has climbed to $51 an ounce, supported by “record lease rates on Friday at 20% for 3-month silver,” while palladium has also rallied strongly after lagging for much of 2025. Hsueh argued that this broader co-movement aligns more closely with long-term historical patterns, suggesting that the earlier gold-only rally may have been the outlier.
While futures positioning data is currently unavailable due to the U.S. government shutdown, ETF flows point to slowing inflows rather than net outflows.
Hsueh also mentioned a leaseback transaction by Umicore involving tied-up gold inventory but cautioned against reading too much into it. “In describing the decision, Umicore noted that historically stable lease rates mean that their annual lease costs ‘will be more than offset by reduced financing costs’,” he said.
Hsueh added that the gold-to-WTI ratio trade remains attractive, with a target range of 72–73. This could be reached either through gold rising toward $4,450 per ounce or crude oil easing toward the bank’s $55 per barrel forecast for 2026.
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