Wells Fargo doubles down on gold price despite slump

Wells Fargo has doubled down on gold despite the metal’s recent slump that had some worried of a reversal into bear-market territory.

In their latest investment research report, the bank’s analysts led by Edward Lee reiterated gold’s long-term bull thesis, citing the same factors that had supported its scorching rally in 2025: lower interest rates, central bank buying and geopolitics.

These factors, as Wells Fargo and many others have highlighted, would provide a structural support for gold that is durable and independent of short-term investment sentiments.

Short-term headwind

Since the beginning of March, gold prices have fallen more than 15% amid concerns over inflation caused by the ongoing Middle East conflict. Prices are now trading around the $4,500-an-ounce level — about a fifth off its record high of nearly $5,600 set in late January.

Despite the metal’s traditional appeal as a safe haven, it has been restrained by the returns offered by competing assets like bonds and currencies. Rising energy prices have so far recalibrated investors’ expectations for interest rate cuts and prompted them to shift safe-haven capital from bullion into the strengthening US dollar.

However, those at Wells Fargo regard these as temporary headwinds that provide “tactical opportunity” for gold buyers, as they believe the inflationary pressures will diminish later in the year.

As noted by Lee, the drivers behind the 2025 run (i.e. rate cuts, central banks) would eventually prevail, leading to a more favourable environment for precious metals.

Raised price target

Accordingly, the bank sees further upside in gold in the coming months, projecting prices to reach between $6,100 and $6,300 an ounce by the end of the year — an 35%-40% increase on current levels.

The forecast also represents a significant increase over the bank’s previous year-end price target, set at $4,500-$4,700 per ounce.

A key motive behind the improved outlook was what the bank called “accelerating policy surprises” — such as tariffs and deregulation — that could increase demand for gold as a portfolio hedge.

“The prospect for lower short-term interest rates and the potential to hedge against accelerating policy surprises prompt us to raise our 2026 gold target,” Lee wrote in his note.

Wells Fargo is not the only major bank that has made bullish calls on bullion. Several others including JPMorgan and UBS have set gold price targets at the $6,000-$6,300 range.