Wells Fargo Investment Institute (WFII) has lowered its year-end gold price targets, cutting its 2026 forecast to $4,900-5,100 an ounce from a previous range of $5,300-5,500 and reducing its 2027 forecast to $5,400-5,600 an ounce from $5,800-6,000. The revision comes even as the bank maintains a broadly favorable outlook on precious metals, framing the adjustment as a recalibration of expectations rather than a change of view. In effect, Wells Fargo is trimming how high it expects gold to climb without giving up on the trade itself, betting that resilient Asian and central bank demand will continue to outweigh the drag from elevated US real yields.

The downward revision is notable less for its direction — it follows a genuinely difficult five-month stretch for gold — than for the fact that the bank is cutting targets even while reiterating a favorable overall stance on precious metals. The arithmetic is also material: the trim removes roughly $400 an ounce from the midpoint of both the 2026 and 2027 ranges, quantifying how much of Wells Fargo's earlier optimism it now attributes to the US rate backdrop. That combination suggests the bank views the current rebound as real but insufficient to fully offset the drag from elevated US real yields, which it identifies as the core headwind since March.

The bank attributes gold's weakness since March largely to rising US inflation-adjusted yields and to concerns that persistent inflation could push the Federal Reserve toward further rate increases. Both forces make non-interest-bearing bullion relatively less attractive than interest-bearing assets, since gold pays no interest to its holders — the opportunity-cost dynamic that has historically made real yields one of the metal's most consistent drivers. Those pressures weighed on the metal even as other sources of demand held firm.

Momentum, however, has returned. Gold prices rose more than 7% in the first week of August alone, the strongest weekly gain since January, supported by hopes for progress toward Middle East negotiations and by investors scaling back their expectations of further Fed rate hikes. Flows into exchange-traded funds have improved as well, with outflows stabilizing and beginning to reverse higher after the difficult stretch that began in March. Wells Fargo describes gold as having regained momentum on the back of these developments.

Beneath the surface, the bank argues, several underlying strengths have persisted. Aggregate global demand held up reasonably well through the first half of 2026, led by international investors who remained particularly constructive amid heightened geopolitical and market uncertainty, inflation risk, and comparatively low interest rates in select markets, including China. Those international buyers, rather than US participants, carried the demand side of the market in the first half.

The regional divergence in performance flagged in the note is stark. While gold's global spot price fell 5% in the first half of the year, Asian investors were persistent buyers throughout the period, and the metal's price measured specifically during Asian trading hours was actually up 13% over the same six months. That split points to a market in which international and central bank demand is doing the heavy lifting against a structurally less supportive US monetary backdrop.

Wells Fargo believes the same geopolitical and market uncertainties driving that Asian demand also reinforced gold's traditional safe-haven role and supported a rebound in central bank purchases during the second quarter. That official-sector support has deep roots: central banks have been net buyers of gold every year for well over a decade, a post-financial-crisis shift toward reserve diversification that has made central bank demand a structural pillar of the market rather than a marginal one.

Taken together, the note describes two forces pulling in opposite directions: traditional demand drivers — geopolitical hedging, central bank buying, and investors in relatively low-rate markets such as China — set against a US monetary backdrop that has become structurally less supportive for a non-yielding asset.

Looking ahead, the bank says these underlying strengths support its continued favorable view on precious metals, but it expects gold's path higher to remain uneven as international demand contends with ongoing headwinds from US monetary policy. The framing implies further gains are likely but uneven, with US rate expectations remaining the swing factor that determines how closely gold tracks the top or the bottom of its revised ranges. For readers tracking how that contest resolves, the signposts are the ones the note itself hinges on: incoming US inflation prints and Fed policy decisions that steer real yields, monthly ETF flow data, and the quarterly central bank purchase tallies tracked by bodies such as the World Gold Council.

It is that combination — constructive on the asset class overall, yet wary of a smooth ride to the top of the range — that ultimately drove Wells Fargo to trim both its 2026 and 2027 targets while stopping short of turning cautious on gold altogether.

The target revision follows an earlier analysis noting that gold was nearing $4,500 resistance as central bank buying met fading Fed rate-hike bets. Even the trimmed ranges sit well above that $4,500 mark, a reminder that a lower target is not a bearish one in absolute terms.

Earlier: Gold nears $4,500 resistance as central bank buying meets fading Fed hike bets

About Wells Fargo Investment Institute

Wells Fargo Investment Institute is the in-house investment research and strategy arm of Wells Fargo's Wealth & Investment Management division. It was formed in 2019 by combining the research, strategy, and manager research teams from across the bank's wealth, brokerage, and retirement businesses into a single unit. The institute is a registered investment adviser and a wholly owned subsidiary of Wells Fargo Bank, N.A. Its output consists of regular strategy reports and annual outlooks rather than public-facing trading calls, positioning it closer to a house view for Wells Fargo's wealth management clients than a sell-side research desk.

Source: Investinglive