Deutsche Bank believes gold is likely to restart upward once it exits war-related stress

Overview

This is a Deutsche Bank special report on precious metals, focusing on how the Iran war, the US dollar, interest rates, oil prices, central bank gold purchases and investment flows affect gold and white-metal prices. The report argues that while war conditions disturbed gold performance through linkages with oil and risk assets, in the base scenario gold’s uptrend is expected to resume if the conflict cools further and the weaker-dollar trend reasserts.

Core views

The core view is that the gold outlook is only temporarily suppressed by war, not structurally reversed. If diplomacy breaks through in April or maritime shipping gradually normalizes, the broad dollar index is likely to move toward January lows, allowing gold to rise above USD 5,000/oz and reach a USD 5,100/oz target in Q2. The year-end gold target was modestly reduced to USD 5,800/oz from USD 6,000/oz, but remains clearly above the long-term reversion path of the dollar. For silver, platinum and palladium, the report says the white-metal outperformance cycle has ended and therefore lowers price forecasts; however, declining China inventories and some residual premiums still support silver tracking gold, with a year-end silver target of USD 88/oz.

Analysis framework

The report combines macro drivers and commodity microstructure: at the macro level it analyzes war de-escalation, the US dollar index, the US rate ranking, the US current account deficit, changes in official custody of US Treasuries overseas, and oil’s pressure on importers and equities; at the commodity level it tracks gold ETF flows, Comex speculative positioning, option risk reversals, the China SGE premium versus Comex, central bank gold buying, silver and PGM leasing rates, exchange inventories, spot premia, and term structure.

Methodology notes

• Macroeconomic driversDollar and real-rate sensitivity framework

  Gold beta to the US dollar and US Treasury real yields has risen

  The report states that factors that were negative for gold during the war—such as a stronger dollar, risk-on appetite, hawkish policy, and official Treasury selling—could reverse to become supportive after further de-escalation, especially since gold’s sensitivity to the dollar and Treasury yields is above normal.

• Flow analysisETF and futures positioning validation

  Investment flows confirm price trend

  The report monitors whether gold ETF outflows stabilize and turn back to inflows again, and whether Comex speculative net longs remain stable, to validate whether the gold uptrend can recover.

• Supply-demand and microstructureLease rates, inventories, premia and inversion signals

  White-metal physical scarcity signals have weakened

  The report uses silver, platinum and palladium lease rates, exchange inventories, China market premia and term structure to judge that the previous scarcity-driven support in white metals has weakened, so white-metal forecasts were reduced.

• Geopolitical scenarioWar de-escalation and oil transmission framework

  Linkages among the Iran war, Hormuz shipping, oil prices and precious metals

  The report decomposes war impact into shipping normalization, oil-path evolution, weakened dollar safe-haven attributes, foreign-exchange pressure from oil-import bills, and equity pressure, and treats further de-escalation as the base scenario for a gold rebound.

Asset mapping & comparison

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

• Gold

  Core constructive asset

  Strengths

  A relatively weak-dollar backdrop, official buying, stable ETF outflow conditions, Comex positioning resilience, and heightened sensitivity to the dollar and rates that could flip to support gold.

  Weaknesses

  Short-term sensitivity to war, oil prices, correlation with risk assets, and hawkish policy shocks.

  Comparison

  Compared with silver and PGMs, gold has stronger defensive and quasi-monetary characteristics in recession or easing-policy-transition scenarios.

  Risks

  Oil remaining persistently strong, equity market pressure, policy staying hawkish, and no diplomatic agreement in Iran by April.

• Silver

  Tracks gold but outperformance cycle has ended

  Strengths

  China SGE and SHFE silver inventories have fallen to levels not seen since 2016, and China premiums have improved, so silver may still be able to follow gold.

  Weaknesses

  Lease rates have eased, inversion and physical scarcity signals have faded, and industrial demand characteristics may drag performance when growth risks rise.

  Comparison

  The report expects year-end XAUXAG around 66 and a silver target of USD 88/oz, implying relatively slightly weaker positioning versus gold.

  Risks

  In a genuine recession scenario, silver could significantly underperform gold.

• Platinum

  White metal to monitor for lease rates and China premiums

  Strengths

  Lease rates remain relatively high, near levels seen in Q2 or Q3 of 2025.

  Weaknesses

  China GFEX premium and scarcity signals have already faded, and exchange inventories help explain lease-rate pullback.

  Comparison

  Compared with silver, platinum lease-rate declines are smaller, but the upside case is less clear than gold.

  Risks

  Weaker global growth, slower industrial demand, and further easing of physical tightness.

• Palladium

  White metal with revised-down forecasts

  Strengths

  Some lease rates still remain relatively high.

  Weaknesses

  China premium has faded, and inventory and lease signals no longer strongly support a scarcity narrative.

  Comparison

  It lacks monetary-asset support unlike gold and also lacks the clearer Chinese low-inventory support seen in silver.

  Risks

  Automotive and industrial demand pressure, recession risk, and fading physical scarcity premium.

• US Dollar

  Inverse driver for gold

  Strengths

  Its traditional safe-haven role during the war has weakened due to official Treasury selling, lack of yield-curve improvement, and lower unhedged-demand for dollar assets from overseas investors.

  Weaknesses

  If geopolitical risk escalates again, the dollar may still attract episodic safe-haven demand.

  Comparison

  The report argues that a broad-dollar weakening trend returning would directly support higher gold.

  Risks

  US rates rising again or safe-haven demand for the dollar returning.

• Crude oil

  Transmission variable for precious metals risk

  Strengths

  If oil transport and supply normalize, inflation and growth pressures would ease, helping gold revert to a dollar-driven framework.

  Weaknesses

  Persistently high oil can suppress precious metals via weak FX balances for oil imports and pressure on equities.

  Comparison

  Oil’s path may not align perfectly with the war’s path and can become an independent source of risk for gold.

  Risks

  Disruption in Hormuz navigation, slow recovery of Gulf output, or further attacks on Saudi infrastructure.

Key data

• Gold Q2 targetUSD 5,100/ozThe report says this level falls within gold’s typical seasonal-quarter range.
• Gold year-end targetUSD 5,800/ozDown from a prior USD 6,000/oz target, assuming broad dollar index depreciation to -4% with ETF and futures flow normalization.
• Typical gold quarterly range10.4%Could encompass a Q2 low around USD 4,650/oz and an upside band near USD 5,150/oz.
• Silver year-end targetUSD 88/ozCorresponding to XAUXAG near 66, reflecting continued upside for silver but relatively weaker versus gold.
• China central bank gold purchases17 consecutive monthsThe PBoC’s continued buying in the March report is cited as evidence of sustained official-sector gold accumulation.
• Poland official gold buyingAbout 3.3 million troy ounces in 2025The report says Poland was the largest official gold buyer in IMF data the prior year and plans to continue increasing holdings.
• 4-week change in overseas official and official-intermediated US Treasury custodyUSD 47,434 million on 2026-04-08The chart supports the view of official Treasury selling and weakening dollar safe-haven attributes.
• Saudi Arabia capacity impairment600 kb/dThe report cites reduced output after Iran attacks on Saudi energy infrastructure as an example of sustained oil-price strength risk.

Impact & implications

If the report’s base scenario materializes, gold investors may move from a war-linked defensive posture back to reallocating toward a renewed gold uptrend. Gold would benefit from a weaker US dollar, recovery of ETF flows, stable futures positioning and continued central bank gold purchases. For white metals, silver may still rise alongside gold, but the outperformance case from physical scarcity is weaker; platinum and palladium still require monitoring of whether lease rates stay elevated. If oil prices remain high and suppress foreign-exchange for oil imports, equities and global growth, precious metals—especially white metals—could come under pressure.

Risks

• The Iran war fails to produce an agreement in April, maritime traffic in Hormuz does not normalize, and energy stress deepens.
• Persistently high oil prices weaken foreign-exchange balances for oil imports, pressure equities, and cause global growth to deteriorate.
• Rising positive correlation between gold and risk assets means that periods of market stress could trigger gold selling as liquidity.
• Core inflation remains above target so policymakers may be unwilling to move toward easing, weakening policy support for gold after growth shocks.
• White-metal physical scarcity signals fade; if recession risk rises, silver, platinum and palladium may significantly underperform gold.
• If dollar safe-haven demand strengthens again or US rate advantage returns, the gold upside case would be undermined.

What to watch

• Iran-related ceasefire and formal agreement path, especially whether a diplomatic breakthrough occurs in April.
• Navigation in the Strait of Hormuz, toll disputes, GCC positioning, and the status of commercial shipping recovery.
• Oil prices, Gulf oil and gas production and refining-recovery pace, and whether Saudi production impairment expands.
• Whether the broad dollar index continues to weaken, and changes in the US current account deficit and G10 front-end rate ranking.
• Changes in overseas official and international-account US Treasury custody, watching whether official selling of Treasuries persists.
• Whether gold ETF flows switch from stable outflows to sustained inflows, especially from developed-market investors.
• Comex gold speculative net longs, 3-month risk reversals, and downside hedging demand.
• China SGE versus Comex gold premium, China gold imports, and signs of unreported official gold buying.
• Lease rates for silver, platinum and palladium, exchange inventories, and China GFEX/SHFE premia and inversion signals.
• Whether the Fed and other policymakers reduce inflation concerns and signal a more dovish policy stance.