Deutsche Bank has significantly lowered its price forecasts for gold, citing the Federal Reserve's continued restrictive monetary policy and weakening demand from exchange-traded funds.
The move by the German lender adds to a growing chorus of institutional caution regarding precious metals, as the central bank's stance continues to weigh on non-yielding assets.
The bank's analysts point to the persistent strength of the US dollar and the ongoing outflow of capital from gold ETFs as primary headwinds.
With the Fed maintaining a hawkish posture, the opportunity cost of holding gold remains elevated, dampening investor appetite for the metal.
This shift in sentiment aligns with recent market movements, where spot gold has retreated under pressure from a strengthening greenback and rising expectations that interest rates may stay higher for longer.
The downgrade comes amid a broader retreat in precious metals and risk assets.