Gold/USD targets $4000 as dollar weakens on diverging central bank policies

Deutsche Bank maintains its bullish gold forecast, projecting XAU/USD to reach $4,000 in 2025 as central bank policy divergence creates favorable conditions for the precious metal. Currently trading at $2,650, gold has gained 28% year-to-date, supported by the Federal Reserve's easing cycle initiation. The analysis highlights that while the Fed continues cutting rates, the ECB has paused its easing program and the Bank of Japan is turning increasingly hawkish, creating downward pressure on the US dollar. This policy divergence erodes the dollar's yield advantage, traditionally a headwind for non-yielding gold. Technical momentum remains strong with gold holding above its 50-day moving average at $2,580. Key support lies at $2,600 while resistance emerges at $2,700. The recommendation to maintain long positions reflects expectations of continued dollar weakness and persistent inflation concerns driving safe-haven demand.