Wells Fargo Sees Gold Prices Rising by Another 11% This Year
Wells Fargo's strategists believe gold prices will rise by an additional 11% by year-end, citing reduced expectations of interest rate hikes and persistent demand from Asian investors. The firm's revised targets for gold prices in 2026 and 2027 are $4,900-$5,100 and $5,400-$5,600 per troy ounce, respectively.
The strategists at Wells Fargo note that gold has regained momentum after a challenging five months, aided by hopes for progress in Middle East negotiations and investors scaling back expectations for Federal Reserve rate hikes. Gold prices rose more than 7% during the first week of August, marking the strongest weekly gain since January.
Despite the potential risks, Sameer Samana, Wells Fargo's Head of Global Equities and Real Assets Strategy, believes that gold has reached a point where downside risks are increasingly limited while long-term upside remains compelling. He notes that markets have likely become overly pessimistic and that investors should focus on the longer-term risk-reward profile rather than short-term volatility.
Samana warns against assuming the correction is over and cautions that technical resistance is likely between $4,500 and $4,900 as investors who bought near highs exit losing positions. However, he emphasizes that gold has historically held up relatively well during economic downturns and that higher oil prices and interest rates are likely to slow the economy.