Gold Prices Soar as Deutsche Bank Predicts Explosive Phase to Continue Through 2026
According to a recent research report by Deutsche Bank, gold is experiencing its fifth 'explosive' price behavior phase since 1979. The current market conditions are similar to four historical periods: the Soviet invasion of Afghanistan in 1980, pre-2008 financial crisis, the 2011 QE cycle, and the 2020 pandemic shock.
The report points out that central bank gold purchases, de-dollarization, geopolitical risks, and interest rate cut expectations have driven gold into this current explosive phase. This round of explosive phase began in August 2024, with a peak BSADF statistic of 3.29, and has lasted for 24 months.
Deutsche Bank's fair value model suggests that the reasonable price range for gold by the end of 2026 is $4,700 to $5,100. The model takes into account central bank gold purchases, de-dollarization, and reserve diversification trends, as well as physical demand and ETF fund flows.
Central bank gold purchases are considered the largest structural support for gold prices, with China being one of the largest buyers. Deutsche Bank estimates that about half of official gold purchases are not reported in IMF data, and this 'unreported demand' is still running at high levels.