- Deutsche Bank's latest quantitative research indicates that the explosive growth phase of gold prices, which began in August 2024, is still ongoing. According to statistical tests of historical data since 1975, such extreme price behavior has only occurred five times.
- Valuation models based on different theoretical dimensions show significant divergence in the fair value of gold. The downward target calculated using the adjusted relative price ratio model for commodities is around $2,600 per ounce.
- After adjusting for variables such as central bank gold purchase demand and real interest rate convexity, the bank maintains an average gold price expectation of $4,600 per ounce for the fourth quarter and anticipates that the upper limit of the fair value range could reach $4,700 per ounce by the end of the year.
Statistical Tests Confirm Continuation of Explosive Growth Phase
Deutsche Bank (DB:US/DBK:DE), based on the Bank for International Settlements (BIS) econometric model analysis, points out that although the statistical value of the gold market under the BSADF test has fallen from a high of 3.3 to 1.3, it remains significantly above the 95% critical threshold. This phenomenon confirms that the price breakthrough that began in August 2024 is still in a historically rare nonlinear expansion cycle. From the perspective of capital flows and market dynamics, high-frequency trading funds have formed a strong consensus to chase prices at key breakout points, leading to short-term price deviations from traditional averages.
Relative Price Ratio Model Indicates Medium to Long-Term Correction Risk
Within the traditional valuation framework based on commodity benchmark ratios, the research team used 1986 data as an anchor, indexing the relative price ratio of gold to overall commodities according to long-term trend growth rates. The results indicate that the current market trading price of gold has a certain degree of premium, implying a downward correction target of approximately $2,600 per ounce. This reflects the valuation tension between physical industrial demand and investment hedging demand. If overall commodity inflation slows, gold prices may face revaluation risks.
Cyclical Regression Model Shows Support Level Established
Cyclical regression analysis using BSADF statistics shows that both the upward extension and downward correction of this round of gold prices are relatively moderate. The model indicates that the gold market has established a temporary bottom support around $3,900 per ounce, without further declining to the theoretical regression model's suggested low of $3,700. This suggests that the market's buying defense line has moved forward, with institutional investors showing strong willingness to buy on dips during the valuation correction process, reducing the probability of a deep shakeout.
Official Gold Purchases and Real Interest Rate Convexity Support High Valuation
After excluding structural adjustment factors such as excess central bank official reserve demand and real interest rate convexity, gold prices have largely bridged the gap with fundamental fair value. Deutsche Bank maintains its forecast of an average gold price of $4,600 per ounce for the fourth quarter of 2026 and notes that the fair value by the end of the year will point to $4,700 per ounce. This indicates that the trend of central bank asset allocation de-dollarization and the tail risks of the macro interest rate path are providing gold with a long-term valuation premium beyond historical norms.
