Wells Fargo lowers gold price target amid rate concerns

Investing.com -- Wells Fargo Investment Institute lowered its gold price targets on Tuesday, citing rising interest rates and a stronger dollar as factors that reduce the metal's appeal.

The institute cut its 2027 year-end gold target to $5,200-$5,400 per troy ounce from $5,400-$5,600. The analysts noted that gold does not pay interest and therefore appears less attractive as interest rates increase. A stronger dollar also serves as a potentially attractive alternative to gold.

The institute said it continues to see upside potential for gold prices through 2027. The analysts added that central bank gold purchases are recovering after slowing during the first quarter of 2026. Exchange-traded fund flows into gold turned positive in July and strengthened through August, indicating retail investors are returning to the metal.

Ongoing concerns over geopolitics, fiscal and budget issues, currency debasement, and broad market uncertainties may still drive demand for portfolio diversification and perceived safe havens such as gold, the analysts said.

The institute expects persistent geopolitical risk and business technology spending to intensify inflation pressure. The Federal Reserve is expected to respond with more interest rate increases. This combination should slow global economic growth, the report said.

Rising borrowing costs, diminished purchasing power, elevated fuel expenses, and fading fiscal support are expected to slow U.S. economic growth. A firmer dollar and higher U.S. interest rates will increase headwinds for gold, though the institute believes the metal's uptrend will continue.

Original Article

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