Gold's two-day shock can't dampen Wall Street enthusiasm! Deutsche Bank remains bullish: expected to surpass $6,000 by the end of the year

Last Friday, international gold prices experienced an epic plunge, and on Monday this week, gold prices continued to fall. However, the sharp two-day correction did not prevent Wall Street from remaining bullish on this precious metal.

Deutsche Bank maintained its previous outlook, expecting gold prices to rise to $6,000 per ounce by the end of this year, nearly 30% higher than this Monday’s price.

It is worth noting that Deutsche Bank just raised its target price for gold last week, and shortly afterward, the precious metals market experienced a historic sell-off.

Deutsche Bank analyst Michael Hsueh stated that he believes this price fluctuation is not the beginning of a larger-scale sell-off, and investor sentiment has not fundamentally changed. The underlying factors supporting higher gold prices will continue to play a role.

In a research report released this Monday, he pointed out that these driving factors include: overseas investors and central banks reducing holdings of dollar assets and promoting diversified asset allocation; at the same time, individual investors (especially in Asia) remain highly enthusiastic about investing in gold.

He mentioned that new participants from Poland, South Korea, and even Hungary, Brazil, Singapore, and Japan are all increasing their gold holdings.

Hsueh also noted that China has always been an important force driving the flow of funds into precious metal investments. He predicts that by 2026, the inflow of funds into China’s gold exchange-traded funds (ETFs) will hit a record high.

JPMorgan strategists also reaffirmed their optimistic outlook on gold prices in a recent research report, stating that the fundamentals remain solid. The bank raised its forecast for gold prices at the end of 2026 from $5,400 to $6,300 per ounce, citing sustained and growing demand from central banks and investors.

On Tuesday during Asian trading hours, gold rebounded from the previous two days of sharp declines. Spot gold once rose above $4,850 per ounce, with current gains approaching 4%.

The day before (Monday), spot gold closed down 4.1% at $4,665.27 per ounce, with an intraday plunge of nearly 10%, due to the Chicago Mercantile Exchange (CME) increasing margin requirements, which intensified the sharp sell-off triggered last week after Wosh was nominated as the next Federal Reserve Chair. Last Friday, gold experienced its largest decline in 40 years, with spot gold falling over 12% at one point. By the close of that day, it had fallen 9.25%.

(Source: Caixin)