Wells Fargo Cuts Gold Forecast for Third Time, Citing High Rates and Strong Dollar

Wells Fargo has once again lowered its price forecast for gold, marking the third downward revision in 2026 as elevated interest rates and a strong U.S. dollar delay the precious metal's anticipated rally. The bank adjusted its price targets for both 2026 and 2027, signaling that the path to new highs will likely take longer than previously expected.

A Series of Downgrades

The Wells Fargo Investment Institute announced it is cutting its year-end 2026 price target for gold to a range of $4,900 to $5,100 per ounce, down from its prior forecast of $5,300 to $5,500. The target for 2027 was also reduced to $5,400 to $5,600, a $400 decrease from the previous range of $5,800 to $6,000.

This marks a significant reversal from the bank's bullish stance in February, when it had raised its 2026 target to as high as $6,300. Since that peak forecast, the midpoint of Wells Fargo's 2026 price target has fallen by $1,200 per ounce.

Headwinds from Rates and the Dollar

The revisions are a direct response to a changed macroeconomic environment. The bank's initial optimism was based on two key assumptions: imminent interest rate cuts by the U.S. Federal Reserve and continued strong buying from central banks. However, the Fed has maintained a hawkish policy stance, which has kept Treasury yields high and strengthened the dollar.

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Higher bond yields increase the opportunity cost of holding non-yielding assets like gold, making it less attractive to investors. According to the report, this dynamic has been compounded by other factors, including profit-taking after gold hit a record high near $5,594 in January, significant outflows from gold-backed ETFs, and a temporary slowdown in central bank purchases.

Outlook Delayed, Not Derailed

Despite the cuts, Wells Fargo clarified that it is not turning bearish on gold but is instead adjusting the timeline for its ascent. The new 2026 price target still represents a potential upside of 11% to 16% from the recent spot price of approximately $4,397 per ounce. Furthermore, the 2027 target implies a potential gain of 23% to 27%.

The bank stated that the long-term fundamental drivers for gold—including central bank demand for reserve diversification and geopolitical uncertainty—remain intact. However, the report concludes that for now, gold's price action is highly sensitive to U.S. monetary policy, with investors closely watching for signals from the Federal Reserve's upcoming meeting minutes.