Gold rally to continue, could hit USD 5000 in 2026, amid tight supply and demand by central banks: Deutsche Bank

NEW DELHI: Gold prices could move close to USD 5,000 per ounce in 2026, supported by strong official sector buying, tightening supply conditions and stabilising investor flows, according to a new research report by Deutsche Bank.

The report highlighted that gold is breaking historical norms and continues to show exceptional performance against the US dollar.

It stated “Altogether these suggest an upgrade to our 2026 forecast to USD 4,450/oz from USD 4,000/oz previously, and a yearly range from 3,950-4,950/oz in 2026”.

The report upgraded its 2026 gold price forecast to USD 4,450 per ounce, up from its earlier estimate of USD 4,000. Importantly, the bank expects gold to trade in a yearly range of USD 3,950 to USD 4,950 per ounce in 2026, placing its upper limit within touching distance of the USD 5,000 mark.

However, the report noted that a high of USD 4,950 per ounce would be a 14 per cent premium over current December 2026 futures prices. The forecast for 2027 stands even higher, at USD 5,150 per ounce, according to the report.

The bank said gold’s strong performance is supported by constructive market factors, including stabilising investor flows and technical measures that suggest a correction in positioning has been completed.

It added that supply-demand data for the third quarter indicates continued interest from central banks, with official gold demand in real US dollar terms ranking as the third highest on record in the third quarter of 2025.

According to the report, the rise in “inelastic demand”, mainly from central banks and exchange-traded funds (ETFs), continues to divert supply away from jewellery markets.

Demand from central banks remains particularly strong, driven by concerns over geopolitical risks and the need for diversification. It expects official sector gold demand to rise to 1,053 tonnes in 2026, compared with 853 tonnes in 2025.

On the supply side, the increase in mined gold production remains modest. Global mine production is expected to rise to 3,715 tonnes in 2026, indicating only a small response to higher prices.

Recycled gold supply, estimated at 1,470 tonnes in 2026, also remains below peak levels seen in earlier periods. Combined with ongoing demand strength, this creates a supportive environment for elevated prices.

With these drivers in place, Deutsche Bank report concluded that gold can extend its recent strength and move close to the USD 5,000 mark in 2026, marking another year of exceptional performance for the precious metal.

It stated, “Thus we see a likelihood of another year of above-model rate of growth in the gold price. We have quantified this excess performance by measuring the pace of official demand over the 2011-21 average, and indexing that to a historical ETF-to-gold price regression”.(ANI)