Deutsche Bank has drastically lowered its price forecast for gold, cutting its outlook for the coming months by approximately 20%.
The German lender cited a shift toward a more restrictive monetary policy stance by the Federal Reserve as the primary driver behind the downgrade.
Additionally, the bank noted a noticeable decline in investment demand for the precious metal, suggesting that the safe-haven bid is losing momentum as rate expectations harden.
Additionally, the bank noted a noticeable decline in investment demand for the precious metal, suggesting that the safe-haven bid is losing momentum as rate expectations harden.
The move marks a significant shift in sentiment for the yellow metal, which has recently traded near multi-month highs.
By reducing its price targets, Deutsche Bank is signaling that the macroeconomic environment is becoming less supportive for non-yielding assets.
Investors are increasingly weighing the opportunity cost of holding gold against the prospect of higher real yields in the US.