Several banks raise target price to $6,000 ahead of Federal Reserve decision

FX678 News, January 29— Since January 19, the weakening US dollar has prompted foreign currency holders to increase their safe-haven precious metals purchases, boosting gold prices to soar. Deutsche Bank and Société Générale have raised their 2026 gold target price to $6,000, as previous targets have been easily surpassed.

On Wednesday (January 28) during the US trading session, spot gold futures hit another record high, reaching $5,311.29. Although gold prices have surged significantly since the low of $4,536.49 on January 16, the trend has remained orderly, with an average daily increase of about $90. Reports indicate that "ongoing economic and geopolitical uncertainty" is driving investors into this safe-haven precious metal. However, the author believes that the core driving force behind this rally is the weakening US dollar—dollar depreciation usually prompts foreign currency holders to increase gold purchases. As of 00:27 (UTC+8) on Thursday, spot gold was quoted at $5,284.44, up $103.4, an increase of 2.00%.

Some opinions point out that even before this round of gains, gold was already supported by multiple factors, including market expectations for Fed rate cuts and “increased gold purchases by central banks under the global de-dollarization trend.”

Since gold is priced in US dollars, any weakening of the dollar benefits gold prices. And since January 19, the US dollar has depreciated significantly, undoubtedly being the main driver of this round of gold price increases.



For forex and gold traders, President Trump’s remarks on Tuesday are particularly noteworthy. When asked about the recent sharp fall in the US dollar, Trump said the value of the dollar was “great,” which heightened investor concerns and led to a sharp drop in the dollar that day.

Meanwhile, some traders attribute the weakening dollar and strengthening gold prices to Trump’s unpredictable economic policies, as well as his continued pressure on Fed Chairman Jerome Powell to cut rates, despite the relatively robust state of the US economy.



This afternoon, the Fed will announce its rate decision, followed by a press conference from Powell, whose remarks are likely to again provoke Trump’s dissatisfaction. Traders hope to gain clues about the timing of the first rate cut from Powell’s speech, but most analysts believe Powell will take a wait-and-see attitude, i.e., whether to cut rates depends entirely on labor market and inflation data.



The market has priced in at least two Fed rate cuts this year. Against this backdrop, an 18% rise in gold since 2026 appears reasonable.



Supported by the above positive fundamentals, many major investment institutions have raised their gold price forecasts, as their previously set 2026 targets have already been surpassed. Deutsche Bank and Société Générale now both expect gold to reach $6,000 by the end of 2026.




(Spot gold daily chart Source: EasyFX)

Technical analysts point out that gold prices are no longer following the trendline formed by the low of $4,274.02, but instead are climbing along a new trendline formed by the low of $4,536.49 on January 16. Today, this trendline is at $5,008.05 (UTC+8), which is the current key support level, though the present price is far above this level.