Deutsche Bank Maintains Year-End Gold Target at $4,600
Miles Bennett
Deutsche Bank strategist Michael Hsueh reaffirms gold is in an "explosive price phase" and holds his year-end target at $4,600 per ounce — two months of sideways trading is not the end of the rally but a shallower-than-usual correction.
Gold has gone sideways for two months — is the rally over?
Gold futures have traded in a narrow $4,000–$4,100 range for nearly two months.
Hsueh's regression model implies the correction low should be around $3,700, yet the actual floor appears to have formed near $3,900.
This means → the pullback is shallower than historical precedents, suggesting bullish momentum remains intact and the "explosive phase" is not over.
How does the $4,600 target hold up?
Hsueh uses three frameworks. The first compares gold's long-run inflation-adjusted growth to broad commodities — that puts fair value at only ~$2,600. He voluntarily discounts this framework, arguing it underestimates gold.
The second applies the BSADF test — a statistical tool designed to detect speculative bubbles. It shows this rally's upside extensions and corrections are both milder than past bubble episodes.
The third is a fair-value model driven by the S&P 500, 10-year Treasury yields, and exchange rates. Even without add-ons for excess official demand, it points to a year-end fair value of ~$4,700 — closely aligned with the $4,600 target.
In plain terms = two of three tools support the target; the one that doesn't was downweighted by Hsueh himself. So $4,600 stands.
How aggressively are central banks buying?
Official-sector gold purchases hit a record $45 billion in Q2 this year.
This means → central banks are not just buying — they are accelerating, directly underpinning the "excess official demand" adjustment in Hsueh's fair-value model.
This reflects why Hsueh leans on the fair-value framework over the commodity-ratio framework — central-bank buying has become one of the most important marginal drivers of gold prices.
How real is the "bubble" risk?
The Bank for International Settlements (BIS) flagged "bubble conditions" in gold as early as August 2024 — the exact starting point of Hsueh's "explosive phase."
The BIS also cited a historical warning: gold crashed sharply after the 1980 Great Inflation; explosive phases tend to end with significant drawdowns.
In plain terms = the higher it climbs, the harder it can fall. The BIS and Hsueh agree on the diagnosis — this is an explosive phase — but the BIS adds a caveat: historically, these phases end painfully.
Over the long run, does gold actually make money?
From 1957 to 2023, gold delivered an average real annual return of 2.5%, beating U.S. CPI at 3.7% over the same period.
Including the post-2024 rally would push that real return even higher.
Whether the $4,600 target is met by year-end depends on two things, per Hsueh: whether official buying sustains its pace, and the trajectory of the S&P 500, Treasury yields, and exchange rates.
Content is for reference only, not financial advice.