Deutsche Bank raised its average gold price forecasts for 2025 and 2026 to $3,139 and $3,700 per ounce respectively, driven by recent economic and geopolitical developments globally.
The bank had previously forecast an average price of $2,725 for this year, and $2,900 for 2026.
U.S. President Donald Trump has shown no sign of backing away from his sweeping tariff plans, and investors bet the mounting risk of recession could see the Federal Reserve cutting interest rates as early as May.
"We conclude that the bull case for gold remains strong despite this week's correction and further upgrade our year-end (fourth quarter 2025) forecast to $3,350 per ounce," the bank said in a note on Monday.
Spot gold was trading at $3,026.54 at 1020 GMT after it slipped more than 3% on Friday, as investors sold off the safe-haven asset to cover their losses from a wider market meltdown.
However, prices are up 15% so far this year, helped by bullion's appeal as a hedge against geopolitical and economic instability.
China's central bank added gold to its reserves in March for the fifth straight month, official data from the People's Bank of China (PBOC) showed on Monday.
Deutsche Bank also said that demand for gold from central banks has expanded from 10% to 24% of the gold market since 2022, compared to their Treasuries demand, which represented only 7% to 10% of net issuance.
Central banks are likely to keep buying gold this year and next. But HSBC has flagged that purchases may fall below the 2022-24 peak levels, moderating if prices rise above $3,000 an ounce, and rising if they drop to below $2,800 approximately.
Last week, HSBC raised its average 2025 and 2026 gold price forecasts to $3,015 and $2,915 per ounce respectively, citing geopolitical risks.
