Deutsche Bank states that gold is currently in an 'explosive price behavior' phase. The bank has not changed its year-end target for the metal, despite recent market movements.
According to Deutsche Bank, the strong upward period for gold that began in August 2024 has not statistically ended yet.
Since 1957, gold has tended to outperform the Consumer Price Index (CPI), a trend that has been especially pronounced in the last couple of years. Deutsche Bank's research shows that gold has maintained a strong upward trend since August 2024.
Valuation and Analysis Methods
Deutsche Bank research analyst Michael Hsueh stated that the bank uses three different analysis methods to evaluate the future direction of gold. In its analysis, the bank referenced studies from the Bank for International Settlements (BIS).
One analysis method used by Deutsche Bank suggests the possibility of the ounce price retreating to the 2,600 dollar level, based on the long-term price relationship of gold compared to other commodities. However, a statistical model used by the bank suggests that gold may have formed a bottom around 3,900 dollars.
The fair value of gold for the end of the year is approximately 4,700 dollars.
This calculated fair value of 4,700 dollars is higher than the bank's previously announced fourth-quarter estimate of 4,600 dollars. The figure takes into account official sector demand and real interest rate effects.
Market Projections
If the year-end gold prediction of 4,700 dollars per ounce is realized and the USD/TRY exchange rate remains at approximately 47.4, the price of gram gold is calculated to rise to the 7,150-7,200 TL band by the end of the year.
Deutsche Bank's calculated fair value for gold per ounce by year-end
