Deutsche Bank believes gold has been disrupted in the short term by the Iran war, but de-escalation and a weaker dollar could still restart the uptrend.

Overview

This Deutsche Bank precious-metals special report discusses the impact of the Iran war, the dollar, oil prices, central-bank gold buying, and investment flows on gold and white metals. The report argues that the shock from the war to the gold outlook is only temporary; if the ceasefire and normalization of commercial shipping continue to progress, a softer dollar and rate sensitivity should again support gold. The report also emphasizes that oil-price risk does not fully overlap with the war path, and if high oil prices persist for longer, they may pressure precious metals through exchange rates, equities, and monetary-policy channels.

Core views

The core view is bullish on gold and cautious on white metals. For gold, the report expects that after de-escalation, prices can benefit from a weaker dollar, high beta to rates and the dollar, stabilization in ETF flows, steady futures positioning, and continued central-bank buying; the Q2 target is USD 5,100/oz and the year-end target is cut from USD 6,000/oz to USD 5,800/oz. For silver and PGM, the report believes the outperforming cycle from 2025 to early 2026 has ended. Signals of scarcity such as lease rates, Chinese premiums, and spot backwardation have broadly faded, so price forecasts are lowered, although lower Chinese inventories and the SGE premium to Comex could still support silver.

Analysis framework

The report combines macro scenarios, cross-asset beta, flow analysis, and physical-market indicators: it first assesses how the Iran war and Strait of Hormuz shipping affect oil prices and risk assets, then analyzes the impact of the dollar index, U.S. rates, real yields, and equity correlations on gold, and finally uses ETF flows, Comex speculative positioning, risk reversals, central-bank buying, Chinese SGE premiums, exchange inventories, lease rates, and the gold-silver ratio to test relative strength within precious metals.

Methodology notes

• Macro scenario analysisWar de-escalation and oil transmission framework

  Treat the Iran war, shipping through the Strait of Hormuz, oil prices, and pressure on oil-importing countries as exogenous shock channels for precious-metals pricing.

  The report treats a war resolution as the base case, but oil-supply risk may be independent of the war path; if shipping resumes and oil prices fall, gold should benefit from a weaker dollar and a recovery in risk appetite, whereas sustained oil strength would weigh on precious metals.

• Cross-asset sensitivityDollar, rates, and risk beta

  Gold has a higher-than-normal sensitivity to USD, UST real yields, and equity-market risk appetite.

  These high betas hurt gold during the war, but if dollar weakness reasserts itself and rate pressure eases, the same sensitivity could turn into upside momentum for gold.

• Flow validationETF, futures positioning, and options risk reversals

  Use investor flows and derivatives pricing to determine whether gold's upside is being confirmed.

  The report watches whether gold ETF outflows stabilize and turn into inflows, whether Comex net longs remain stable, and whether 3-month risk reversals indicate that demand for downside protection is explaining positioning resilience.

• Physical and official demandCentral-bank buying, Chinese premium, and exchange-inventory indicators

  Use official-sector buying, Chinese SGE/SHFE/GFEX indicators, and lease rates to gauge physical tightness.

  Continued PBoC buying, Poland's purchases, and other indicators of Chinese demand support gold; by contrast, lease rates, premiums, and backwardation signals in white metals have cooled, showing that the prior scarcity driver has weakened.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• Gold

  Core bullish asset

  Strengths

  Benefits from a weaker dollar, real-rate sensitivity, renewed ETF inflows, stable Comex positioning, central-bank buying, and resilient Chinese demand.

  Weaknesses

  In the short term, it may be pressured by war-driven oil shocks, equity-market stress, and liquidity demand.

  Comparison

  Compared with silver and PGM, gold is more likely to receive relative support in a recession or easing-policy scenario.

  Risks

  Failure of an Iran deal, no normalization in Strait of Hormuz shipping, sustained oil strength, continued hawkish policy, and no return of ETF flows.

• Silver

  Upside potential but more cautious than gold

  Strengths

  Chinese SGE and SHFE inventories have fallen to the lowest levels since 2016, the SGE premium versus Comex has improved, and the year-end target remains USD 88/oz.

  Weaknesses

  Silver lease rates have declined and the short-end SHFE backwardation has disappeared, weakening the physical-scarcity signal.

  Comparison

  The report assumes XAUXAG around 66 by year-end, meaning silver can still rise but is likely to underperform gold slightly.

  Risks

  If high oil prices create growth pressure or trigger recession, silver could materially underperform gold because of its industrial exposure.

• Platinum and palladium

  White metals under observation

  Strengths

  PGM lease rates remain relatively high, at levels similar to Q2 or Q3 2025, so they are worth continued monitoring.

  Weaknesses

  Signs in GFEX that Chinese buyers were willing to pay premiums for platinum and palladium have completely faded, and the scarcity situation has eased.

  Comparison

  Compared with gold, PGM are more influenced by industrial demand and physical inventory changes and have weaker safe-haven characteristics.

  Risks

  Slower global growth, weaker auto-chain demand, and inventory releases could push lease rates lower.

• USD

  Inverse driver for gold

  Strengths

  If the broad dollar index falls back, gold's high dollar beta will magnify upside momentum.

  Weaknesses

  The dollar's safe-haven demand weakened during the war because of official Treasury selling, lack of spread improvement, and foreign investors' reluctance to buy unhedged USD assets.

  Comparison

  Dollar weakness is an important macro precondition for the report's bullish view on gold.

  Risks

  If the dollar regains safe-haven buying or U.S. rate advantages improve, gold's advance could stall.

• Oil

  Key risk transmission variable

  Strengths

  If supply normalizes and oil prices fall, inflation and growth pressure would ease and support gold's risk beta.

  Weaknesses

  Persistently strong oil prices would weaken oil-importer currencies, drag on equities, and raise the risk of a more hawkish policy response.

  Comparison

  The oil path does not necessarily match the war path exactly, making it an observation variable independent of geopolitical agreement.

  Risks

  Unstable Strait of Hormuz shipping, disruptions in Gulf production and refining recovery, and attacks on Saudi capacity.

Key data

• Gold Q2 targetUSD 5,100/ozThe report says this target lies within gold's typical quarterly 10.4% trading range.
• Gold year-end targetUSD 5,800/ozCut from the prior USD 6,000/oz, assuming the broad dollar index weakens by -4% and ETF and futures flows recover.
• Gold quarter-to-date lowaround USD 4,650/ozBased on the daily close, the report says the upper end of the typical quarterly range could accommodate around USD 5,150/oz.
• Gold typical quarterly trading range10.4%Used to argue that the USD 5,100/oz to USD 5,150/oz target is not an unusual move.
• PBoC gold buyingBuying for 17 consecutive months through March 2026Evidence of continued official-sector gold accumulation.
• Poland central-bank gold buyingBought 3.3 mm troy oz in the prior year's IMF dataThe report says Poland was the largest official gold buyer last year and plans to continue increasing its gold reserves.
• Silver year-end targetUSD 88/ozCorresponds to XAUXAG of around 66, indicating that silver still has upside but is slightly weaker relative to gold.
• Gold-silver ratio assumptionAround 66 at end-2026, around 63 at start-2027, and around 65 at start-2028The report believes the January 2026 low in the gold-silver ratio marked the bottom of the current cycle.
• Oil price shock caseSaudi oil capacity reduced by 600 kb/dThe report cites the Iranian attack on Saudi oil-production infrastructure as an example of oil-supply risk.
• Chinese silver inventoriesFell to the lowest recorded level since 2016The report sees this as one of the positive signals that silver could still follow gold higher.

Impact & implications

For investment implications, gold remains the most upside-levered precious metal in the report, but the rally depends on de-escalation, a weaker dollar, a recovery in flows, and continued central-bank demand. Silver, platinum, and palladium look less attractive on a relative basis because the physical-scarcity evidence that previously supported outperformance has faded; if high oil prices worsen global growth or raise recession odds, white metals could underperform gold materially. For macro assets, the dollar's reserve-currency status, the petrodollar cycle, U.S. real rates, and equity-market pressure will all affect gold's path.

Risks

• The Iran war fails to reach an agreement in April, and commercial traffic through the Strait of Hormuz cannot normalize.
• Oil prices remain strong, pressuring oil-importer currencies, weakening equities, and weighing on gold.
• Core inflation remains above target, and Fed and other policymakers are unwilling to pivot to easing, reducing precious-metals support.
• ETF and futures flows fail to move from stabilization to clear inflows, leaving gold's rally without investor confirmation.
• White-metal physical-scarcity signals continue to fade, with lease rates, premiums, and backwardation declining further.
• If high energy costs make the recession scenario more credible, silver, platinum, and palladium could significantly underperform gold.
• If the dollar regains safe-haven demand or U.S. rate differentials improve, gold's high sensitivity to the dollar will turn back into a headwind.

What to watch

• Progress in de-escalating the Iran war, the enforceability of any ceasefire agreement, and whether Pakistan-led diplomacy makes a breakthrough.
• Transit through the Strait of Hormuz, Gulf oil production and refining recovery, and the path of WTI and global oil prices.
• Whether the broad dollar index moves back toward the January low, as well as U.S. current-account data, spreads, and relative U.S. equity performance.
• Whether gold ETFs move from outflow stabilization to sustained inflows, especially among developed-market ETF investors.
• Changes in Comex gold speculative net longs, 3-month risk reversals, and downside-protection demand.
• Whether PBoC, Poland, and other official-sector gold buying continues, and whether Türkiye's selling remains only an exception.
• Chinese SGE premiums versus Comex for gold and silver, SHFE silver inventories, and GFEX premiums for platinum and palladium.
• Whether the Fed and other central-bank officials turn more dovish in their comments on inflation, growth, and energy shocks.