Deutsche Bank sees gold price averaging $4,450 next year

Gold prices edged lower on Thursday, pausing after a strong run this week, yet the pullback did little to deter Deutsche Bank (DBK.DE) from sharply upgrading its medium-term outlook for the metal.

Gold futures (GC=F) lost 0.2% to $4,195.60 per ounce, while spot gold slipped 0.1% to $4,164.03 an ounce at the time of writing.

The modest retreat followed a rally fuelled by growing market confidence that the US Federal Reserve will cut interest rates at its 9–10 December meeting.

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Traders are now assigning a 79.8% probability to a 25 basis-point cut, according to CME FedWatch, a steep jump from 24% a week earlier. Expectations have also been buoyed by speculation that a more dovish figure could succeed Fed chair Jerome Powell, alongside a series of weaker-than-expected US economic indicators.

Against this backdrop, Deutsche Bank (DBK.DE) has raised its average gold (GC=F) price forecast for 2026 to $4,450 per ounce from $4,000, projecting a trading range of $3,950 to $4,950. A peak of $4,950 would stand roughly 14% above current December 2026 futures.

The bank attributed the upgrade to resilient investor appetite, continued central-bank accumulation and a muted supply response.

“The positive structural picture shows inelastic demand from central banks and ETF investment diverting supply from the jewellery market. Also, overall growth in demand outpaces supply,” analyst Michael Hsueh said in a note.

Oil prices slipped on Thursday as hopes for a ceasefire between Ukraine and Russia prompted traders to anticipate a potential easing of Western sanctions on Russian crude.

Brent crude futures (BZ=F) retreated 0.1% to $62.45 per barrel at the time of writing, while West Texas Intermediate (WTI) futures (CL=F) dropped by the same margin to $58.62 a barrel.

The moves came amid a cautious market tone ahead of this weekend’s opec+ meeting and the US Thanksgiving holiday.

“Oil (BZ=F, CL=F) is inching lower this morning largely on hopes of a Ukraine peace breakthrough and a broader unwinding of the war-premium, but the market still feels thin and directionless ahead of the OPEC+ meeting and the US thanksgiving lull,” said Phillip Nova’s senior market analyst Priyanka Sachdeva.

OPEC and its allies are expected to leave production levels unchanged at their Sunday meeting, according to three OPEC+ sources cited by Reuters. Some members of the group, which account for roughly half of global output, have been increasing production since April in a bid to secure market share.

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Sachdeva warned that the supply backdrop leaves crude exposed. “The real story is that prices remain extremely vulnerable and any serious progress on peace talks would unleash more freely flowing Russian barrels into an already-oversupplied market, keeping crude skewed to medium-term downside with only short-lived spikes,” she said.

Expectations of a US Federal Reserve rate cut in December helped limit the day’s declines, as lower borrowing costs generally support economic activity and oil (BZ=F, CL=F) demand.

Still, oversupply concerns persist. Analysts at JPMorgan (JPM) have highlighted a growing global glut and predict that Brent (BZ=F) prices could fall below $40 a barrel by the end of 2027 if the imbalance deepens.

Sterling held broadly steady against major currencies on Thursday after touching a one month-high against the dollar, as investors continued to digest chancellor Rachel Reeves’ budget, which included a further round of tax increases.

Sterling was unchanged against the dollar, holding at $1.3227, and 0.1% lower versus the euro, trading at €1.1402. The pound (GBPUSD=X, GBPEUR=X) traded as high as $1.3268 early this morning, before retreating again, hitting its highest since 29 October.

The US dollar index (DX-Y.NYB), which tracks the greenback against a basket of six major currencies, was flat at 99.59, struggling amid rising odds of Fed rate cut bets in December.

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Sterling has found some support following Reeves’ budget, which outlined £26bn in tax rises, on top of the £40bn increase introduced in last year’s fiscal package. The chancellor said the government now has £22bn in fiscal headroom to cushion unexpected shocks.

However, the Office for Budget Responsibility cautioned that the space remains “limited” relative to its projections, underscoring the constraints facing policymakers as they seek to balance economic support with fiscal discipline.

In equities, the FTSE 100 (^FTSE) was muted at 9,697 points. For more details on market movements, check our live coverage here.

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