Deutsch was born in Dolni Kounice, Moravia, Austria, as Eliezer Deutsch, the son of Bernhard L. Deutsch, a merchant, and Elise Wiener. He always called himself Gotthard, an attempted translation into German of his Jewish given name. Deutsch entered Jewish Theological Seminary of Breslau in October 1876. While attending seminary classes, he also enrolled in afternoon classes at the University of Breslau. At the seminary, he was influenced by the noted Jewish historian Heinrich Graetz. Matriculating in 1879 at the University of Vienna, two years later he received his Ph.D. in history.