WFII Cuts Gold Price Target by 20% Amid Fed Rate Hikes

Wells Fargo Investment Institute (WFII) has reduced its gold price target for 2026 to $4,900-$5,100 per ounce. This is a significant downward revision from its previous forecast of $5,300-$5,500, which was announced in June.

The bank's revised estimate comes after it initially predicted that gold would reach between $6,100 and $6,300 this year. The latest cut represents a roughly 20% reduction at the midpoint.

WFII attributes the downward revision to the Federal Reserve's more hawkish stance on interest rates. This has made holding non-yielding assets like gold less attractive, as investors face higher opportunity costs.

Gold prices have indeed been trading within a narrow range of $4,200-$4,800 over recent months. While some analysts still see potential for the metal to rally in the long term, the near-term outlook is more subdued.