Gold prices have recently not responded to the usual developments of a safe-haven asset in the context of increasing geopolitical tensions in the Middle East. However, according to a US bank, this precious metal is being affected by short-term macroeconomic factors, while long-term prospects remain positive.
In the latest global investment strategy report, commodity experts from the third largest bank in the US, Wells Fargo (WFC), said that the recent correction of gold prices took place in the context of investors re-evaluating the macroeconomic environment with many variables such as interest rate, USD and real yield developments.
Wells Fargo Bank believes that the rise of the USD, US Treasury bond yields and changes in monetary policy expectations are factors putting pressure on gold prices.
The assessment was made in the context of gold prices recording their strongest decline since 1983. Gold prices have fallen nearly 22% since the peak of about 5,600 USD/ounce set at the end of January. The nearest spot gold price was at 4,391.50 USD/ounce, down about 2.7% in the day.
After the initial upward momentum when the conflict broke out, the safe-haven role of gold quickly weakened as defensive capital shifted to the USD in the context of the market re-adjusting monetary policy expectations.
Wells Fargo Bank believes that the diễn biến of real yields is one of the factors that significantly affect gold prices because it changes the opportunity cost when holding non-performing assets.
Although gold prices have adjusted recently, Wells Fargo still maintains a positive outlook for the precious metal in the medium and long term.
The bank forecasts that gold prices could reach about 6,100–6,300 USD/ounce by the end of 2026, with momentum coming from the continued high gold buying demand of central banks along with the possibility that factors putting pressure on the market are gradually being adjusted over time.
Experts also believe that the gold buying activity of central banks is still higher than the long-term average, thereby continuing to create an important support foundation for the gold market.
In its upcoming outlook assessment, Wells Fargo believes that the economic impact of the current conflict may be limited, while overall economic conditions remain relatively stable.
This bank continues to maintain a positive view on the growth outlook for 2026 and believes that recent developments in gold prices may create opportunities for investors to consider increasing positions according to a suitable roadmap when the market becomes more stable.
