Gold hits fresh high as Deutsche Bank sees potential for above $4,000 by year-end
Analysts cite inflation hedging, central-bank purchases and easing policy as gold could be among the year’s top performers
Gold futures climbed to a fresh intraday high above $3,800 an ounce on Tuesday as investors continued to pour money into bullion amid stubborn inflation pressures and ongoing geopolitical risks.
Analysts at Deutsche Bank said gold could rise above $4,000 by year-end, implying a more than 50 percent return for the year. The inflation-adjusted price, called the real price, had already set a record earlier this month for the first time since 1980.
While bullion surged, major stock indexes have also logged record highs this year, underscoring the uneven landscape where equities thrive alongside a strong bid for safe assets. Henry Allen, vice president and macro strategist at Deutsche Bank, said in a client note that gold has multiple drivers but a key one is the perception that it acts as a haven that investors buy during times of fear. He noted that gold does not pay a dividend or coupon, and over the very long term it has struggled to compete with other asset returns.
Central bankers have continued to accumulate gold as a safeguard during crises. A World Gold Council survey found that about 85 percent of central bankers said gold's performance during tumultuous times was highly or somewhat relevant to their portfolios, and 71 percent cited it as a hedge against geopolitical risks. About 95 percent expect global gold reserves to increase this year.
Fed policy has also supported bullion's bid. The Federal Reserve cut interest rates by 25 basis points earlier this month, the first easing move since December 2024, and officials signaled that more cuts could come this year. A lower rate environment tends to push Treasury yields lower, which makes nonyielding gold more attractive and can help support higher bullion prices.
Geopolitical tensions, including the war in Ukraine and renewed strains in the Gaza conflict, have underscored safe-haven demand, while a softer dollar at times has lent support to gold prices. Some analysts warn that bullion gains could slow if inflation cools or if rate expectations shift, but the present combination of policy easing and geopolitical risk remains a supportive backdrop.
