Written by: Rita

Gold is currently experiencing its fifth "explosive" price behavior phase since 1979.

In a research report released by Deutsche Bank on August 13, it was identified through BSADF testing (a statistical tool for identifying explosive behavior in asset prices) that the current gold market is in an explosive phase, alongside historical periods including the Soviet invasion of Afghanistan in 1980, the financial crisis before 2008, the QE cycle in 2011, and the impact of the pandemic in 2020. The report points out that a combination of four factors—central bank gold purchases, de-dollarization, geopolitical risks, and expectations of interest rate cuts—has driven gold into this current explosive phase beginning in August 2024, which has now lasted for about 24 months.

The Fifth Explosive Phase Has Been Confirmed

Deutsche Bank's tests show that this round of the gold explosive phase began in August 2024, with a peak BSADF statistic of 3.29, lasting for 24 months. Historically, the four similar phases were: 1980 (Soviet invasion of Afghanistan, U.S. CPI reached 13%), 2006 to 2008 (17% depreciation of the dollar, rising subprime default rates), 2008 to 2013 (zero interest rates, QE, European debt crisis, downgrade of U.S. sovereign rating), and 2020 (pandemic impact, negative real interest rates).

Deutsche Bank points out that the core difference in this round compared to the previous four rounds lies in the drivers: Previously, inflation, crises, or monetary policy were the main drivers; this round is primarily driven by the structural behavior of central bank gold purchases, with de-dollarization and diversification of reserves being long-term trends, rather than cyclical safe-haven responses.

Fair Price Model Points to 4700 to 5100 USD

Deutsche Bank cross-validated the reasonable price range of gold using multiple models. The basic model shows that the current fair value of gold is about 4700 USD/ounce, indicating an upside potential of about 20% from the current price. When including the growth of U.S. federal debt, the model suggests that gold "should" have risen to 6400 USD; if only considering central bank gold purchases and ETF fund flows, gold "might" drop to 3700 USD. Deutsche Bank believes the 4700 USD baseline scenario is the most reasonable, reflecting the structural support from central bank gold purchases while also considering the suppressive effect of gold prices on physical demand.

Regression models show that the current gold price has fallen back to the negative deviation side from the actual interest rate and U.S. dollar regression line, and historically, such a situation often precedes a price reversion. Deutsche Bank expects the gold price range to be 4700 to 5100 USD by the end of 2026.

Central Bank Gold Purchases Are the Biggest Structural Support

Central bank gold purchases are the variable most valued by Deutsche Bank. Global foreign exchange reserves have remained roughly stable since 2014, but central bank gold purchases have increased six-fold since the third quarter of 2022 compared to the 2016 to 2021 levels. Deutsche Bank estimates that about half of the official gold purchases are not reported in the IMF data, and this "unreported demand" is still running at a high level, with purchasing behavior being price insensitive.

China is one of the largest buyers. Deutsche Bank data shows that China's gold imports have remained high when priced in dollars, with the SGE (Shanghai Gold Exchange) premium consistently remaining positive. When Indian demand fell due to high gold prices, Chinese demand took over the buying. Deutsche Bank believes that central bank gold purchases have shifted from "cyclical safe-haven" to "structural allocation," a change that has altered the pricing framework of gold.

ETF fund flows are also turning positive. Global gold ETFs have a rolling inflow of approximately 1.5 million ounces over 30 days, with Asian buyers continuously increasing their holdings, while sellers in Europe and America are reducing theirs. Deutsche Bank estimates that every change of about 15 tons in ETF demand can drive a 1% change in gold prices.

Gold-Silver Ratio and Market Structure Provide Auxiliary Signals

Deutsche Bank also provided several auxiliary observations from a market structure perspective. The gold-silver ratio (XAUXAG) is currently at a high level; historically, corrections in the gold-silver ratio typically occur in the later stages of gold bull markets, with investors participating in "catch-up trades" by going long on silver. However, Deutsche Bank points out that silver spot discounts and lease rates have returned to normal from the tight conditions seen in Q1, indicating that the physical tightness of silver is easing, and the signal for gold-silver ratio correction is unclear.

Regarding platinum group metals, lease rates for platinum and palladium have also fallen, indicating that the previous supply concerns from Russia are dissipating.

Deutsche Bank's judgment on gold comes from the consensus of several cross-validated models. The structural support of central bank gold purchases, the long-term trend of de-dollarization, expectations of the Federal Reserve's rate cut cycle, and the negative deviation of gold prices from actual interest rates and the U.S. dollar regression line all point in one direction. 4700 to 5100 USD is a reasonable target range before the end of 2026.

Disclaimer

This article is a整理与解读 of third-party brokerage research reports (Deutsche Bank, August 13, 2026) by Chaoxiang Research, along with the organization of public market information. The ratings, target prices, earnings forecasts, and related judgments quoted in this article are all the opinions of the analysts of the brokerage, representing only their affiliated institutions' stance and do not represent the views of Chaoxiang Research, nor do they constitute any investment advice.

The market carries risks, and decisions must be made independently. This article should not be used as a basis for buying or selling any securities.