After a strong correction from the historical peak, world gold prices are under pressure due to expectations that the US Federal Reserve (Fed) may maintain a tight monetary policy for longer. However, according to the Global Investment Strategy – July 2026 report of Wells Fargo Investment Institute (WFII), short-term fluctuations have not changed the positive outlook for the precious metal in the medium and long term.
According to Wells Fargo, pressure on gold prices in the past time mainly came from the developments of bond yields and high interest rate expectations, causing the attractiveness of non-profit assets such as gold to somewhat decline. However, this organization believes that this is mainly a cyclical factor, while long-term supporting drivers are still maintained.
The report points out that the global investment environment is entering a volatile phase as the world economy faces geopolitical risks, inflationary pressure, supply chain restructuring and the explosion of artificial intelligence (AI). In that context, real assets, including gold, continue to play an important role in portfolio diversification and risk hedging.
One of the factors highly appreciated by Wells Fargo is the trend of increasing gold reserves of central banks. Gold purchases to diversify foreign exchange reserves and reduce dependence on the USD are expected to continue to provide support for the market in the coming years.
In addition, prolonged geopolitical instability in many regions around the world is also seen as a factor maintaining demand for safe-haven assets. According to Wells Fargo, as risks in the financial market increase, gold is still one of the priority options for investors to preserve asset value.
Although not excluding the possibility that gold prices will fluctuate in the short term due to the Fed's monetary policy, Wells Fargo still maintains a positive stance on the precious metal. This organization continues to forecast that gold prices could reach 5,300-5,500 USD/ounce by the end of 2026, before increasing to 5,800-6,000 USD/ounce by the end of 2027.
According to Wells Fargo, this outlook reflects the belief that structural supporting factors, including central bank gold buying demand, the trend of asset diversification and the unstable economic-geopolitical environment, will continue to overwhelm short-term pressures from interest rate policy.
In the context that the market is still continuously adjusting expectations about Fed policy, Wells Fargo believes that investors need to look beyond immediate fluctuations. With its role as a defensive asset and the ability to diversify investment portfolios, gold is still considered one of the notable investment channels in the 2026-2027 period.
