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XAU / USD would plummet towards $ 1,500 – Deutsche Bank

Deutsche Bank strategists see that investment demand in gold is weakening as there is an outflow of funds. They estimate that a third of the accumulation of the pandemic era has been undone. XAU / USD is forecast to drop sharply towards the $ 1,500 level

Key statements:

“We see weakness as investment demand weakens further, while increased physical demand in China and India provides compensation but does not keep pace.”

“The performance of gold in the first quarter lends credence to the importance of real returns. Although the initial rise in nominal returns was offset by higher inflation expectations, the February / March acceleration outpaced reflation. The lift-off of real risk-free returns from record lows has the potential to sustain the gradual reversal of investment buildup since early 2020, now about 1/3 of the way. ”

“We do not see the elasticity of physical demand from China and India to provide sufficient support before $ 1,500 / oz.”

We believe that silver will be comparatively strong in a global recovery, although more in situations of steepness favorable to risk than in disorderly tantrums, in which cases silver tends to weaken more rapidly than gold. “

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