Wells Fargo Investment Institute cut its 2027 year-end gold target to $5,200-$5,400 an ounce, pointing to rising interest rates and a stronger dollar. The revision landed as gold stayed near a seven-week low, pressured by a 19-year high in Treasury yields and growing bets on another Fed rate hike.
Wells Fargo trims its 2027 target
Wells Fargo Investment Institute lowered its 2027 year-end gold price target to $5,200-$5,400 per troy ounce, down from $5,400-$5,600. The institute's analysts said gold pays no interest, so it looks less attractive as rates rise. A stronger dollar adds another headwind, giving investors an alternative to the metal.
Rising borrowing costs, diminished purchasing power, elevated fuel expenses and fading fiscal support are expected to slow U.S. economic growth, the analysts said. They expect persistent geopolitical risk and business technology spending to intensify inflation pressure, prompting the Federal Reserve to respond with further rate increases.
Yields push gold to a seven-week low
The target cut came as gold felt the weight of the bond market. The 10-year Treasury yield climbed to a fresh 19-year high, increasing the cost of holding an asset that generates no income. Gold slumped 4% on Monday. The metal touched about $4,130 an ounce before inching up Tuesday, though it stayed near a seven-week low.
Markets now see around a 70% probability of another rate increase in October, which further dulls gold's appeal against yield-bearing assets. Cleveland Fed President Beth Hammack said the rise in long-term yields reflects a stronger growth outlook, concerns about government debt and expectations for additional rate increases.
Institute still sees upside through 2027
Despite the lower target, Wells Fargo Investment Institute said it continues to see upside potential for gold prices through 2027. Central bank gold purchases are recovering after slowing in the first quarter of 2026. Exchange-traded fund flows turned positive in July and strengthened through August, signaling retail investors are returning to the metal.
Ongoing concerns over geopolitics, fiscal and budget issues, currency debasement and broader market uncertainty may still drive demand for portfolio diversification and safe havens such as gold, the analysts said. A firmer dollar and higher U.S. rates will add headwinds, but the institute believes gold's uptrend will continue.
Sources: Commodities & Futures News, Commodities Analysis & Opinion
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