Wells Fargo Adjusts Gold Price Target Despite Cautious Outlook

Wells Fargo Investment Institute (WFII) has adjusted its gold price target for the end of 2026 to $4,900-$5,100 per ounce, down from a previous estimate of $5,300-$5,500. The organization still maintains a positive outlook on gold, expecting it to regain momentum after five months of difficult developments.

In July, gold prices increased by more than 7%, with the largest weekly increase since January. This surge is attributed to changes in expectations about the Federal Reserve's monetary policy, which has reduced forecasts that interest rates will continue to rise.

Gold prices are influenced by interest rates, as high interest rate environments increase the opportunity cost of holding precious metals. Conversely, declining expectations of a prolonged high-interest-rate environment may improve gold's attractiveness.

The Wells Fargo report highlights investment demand as another factor supporting gold prices. Capital inflows into gold ETFs have stabilized and begun to reverse in August, with the largest gold ETF fund experiencing an increase in circulation volume.