Wells Fargo sees a more favorable long-term setup for gold after the metal pulled back more than 20% from its January record high, according to comments cited by BlockBeats on July 22.
Sameer Samana, head of global equities and real assets strategy at Wells Fargo, said the risk-reward profile has changed. In his view, gold’s downside is narrowing, while its longer-term upside still offers an attractive proposition for investors.
Most Fed hike risk is already in the price, Samana says
Samana said markets have already absorbed most of the Federal Reserve’s rate-hike risk. If federal funds rate futures are pricing in another two to three rate increases, then gold prices are also likely reflecting a similar degree of tightening pressure.
He said the more important issue now is whether the market will face an unexpectedly large round of additional rate hikes. He does not see that as a high-probability outcome.
Near-term pressure remains
According to Samana, recent pressure on gold has come from higher oil prices, firmer expectations for Fed tightening and rising real yields. Even so, he said market sentiment may have turned too pessimistic and that most negative factors have already been digested by prices.
He added that gold could still move lower in the short term because the technical picture has not yet confirmed a bottom. Samana said the metal could fall to $3,500, while the $4,500 to $4,900 range may serve as resistance on any rebound. He also noted that some investors who bought at higher levels may choose to cut losses in that zone.
Wells Fargo keeps its longer-term bullish view
Despite the short-term risk, Samana said gold’s broader uptrend remains intact. He said an economic slowdown could push the Federal Reserve back toward rate cuts and lead policymakers to adopt more accommodative measures, which would give gold fresh support.
Wells Fargo Investment Institute had previously forecast that gold could rise to $5,300 to $5,500 per ounce by the end of 2026, then climb further to $5,800 to $6,000 by the end of 2027.