The call matters because it comes after a heavy shakeout, and positioning that stretched tends to amplify any rebound once selling is exhausted. Deutsche’s warning about thin liquidity over Golden Week suggests one more flush lower is possible before a base forms, so near-term volatility could stay high. The Fed’s tightening path and 5% yields remain the main headwind. Ghali’s case is that official-sector demand now outweighs that rate drag. Oil above $100 is a double-edged factor: it supports gold as an inflation and geopolitical hedge, but feeds the higher yields that weigh on it. For the wider complex, the contrast between silver oversupply and copper scarcity points to relative-value trades over a broad metals bet.
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Earlier,
- Oil is gold’s biggest enemy right now, Bank of America warns. Downside risk under $4000.
- Morgan Stanley’s Gower sees $4,000 as a strong floor for gold, cites three supports
- How to trade gold today as the gold futures market is very close to Friday’s close
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Deutsche Bank reads gold’s refusal to break lower as a sign central banks are quietly buying, and it is telling investors heading to Sorrento to join them.
Summary:
- Deutsche Bank’s head of metals research, Daniel Ghali, told BNN Bloomberg (gated) gold is oversold and underowned and attractive for next year.
- Gold hasn’t set a new low since July despite 10-year yields above 5% and oil above $100. Official buying is more than double its 2021-22 pace.
- Also, in a September 30 note he describes positioning near capitulation: CTA net shorts are the largest since October 2021 and discretionary longs are down about 55% from June.
- Ghali urged investors to “buy in Sorrento” during the LBMA conference, but warned thin Golden Week liquidity could force a final flush first.
- He expects silver to underperform amid oversupply, and sees copper, facing its tightest market since the 1980s, offering the biggest gains.
Gold’s ability to hold its ground despite US 10-year Treasury yields above 5% and oil above $100 a barrel makes it attractive heading into next year, according to Daniel Ghali, head of metals research at Deutsche Bank.
In an interview with BNN Bloomberg on October 2, Ghali highlighted that gold has not set a new low since July. He described that as strong and resilient price action given the pressure from rising yields. He said the metal now looks oversold and underowned, with the Iran war having temporarily pushed discretionary investors to the sidelines.
Ghali said positioning resembles 2022, but the backdrop is very different. He said purchases by central banks and other official buyers are more than double their 2021 to 2022 pace, while institutional participation in gold has grown by around 70% since 2021.
A Deutsche Bank note from Ghali dated September 30, as reported by BigGo Finance, described gold positioning as nearing capitulation. Trend-following funds hold their largest net short position since October 2021, discretionary traders have cut long positions by around 55% from a June peak, and open interest in CME gold futures has fallen to an extreme low. The note said that gold’s failure to make new lows despite this suggests central banks and institutions are quietly absorbing the selling.
Ghali urged investors to buy in Sorrento, a reference to the London Bullion Market Association’s annual conference in the Italian resort town this weekend. He cautioned, however, that thin liquidity during China’s Golden Week holiday could push the market into a final capitulation first.
His outlook for the rest of the metals complex was more mixed. He said silver has swung from extreme scarcity to oversupply, with London inventories at their highest since November 2024 and Chinese solar demand down by about a third this year. That leaves room for further declines and underperformance against gold. Copper, by contrast, faces its most acute scarcity since the 1980s, with the US and China holding roughly 70% of above-ground stocks. Ghali sees it offering the largest potential gains in the near and medium term.
This article was written by Eamonn Sheridan at investinglive.com.