(Kitco News) – Precious metals will benefit from ongoing geopolitical conflict and persistent economic uncertainty, with gold prices projected to hit fresh all-time highs in 2026, according to the 2025 midyear outlook from Wells Fargo.
“We believe that material commodity price corrections have created attractive opportunities to position for an improved economic environment later this year and into 2026,” the analysts wrote in the report. “We expect improved U.S. economic conditions later in 2025 to drive demand growth for commodities,
especially areas that are more cyclically sensitive.”
Wells Fargo is advising that investors rotate into sectors “that could benefit from an improving macro environment such as Energy or Precious Metals.”
The analysts suggest positioning portfolios to protect against policy and geopolitical uncertainty.
"Rapid economic policy changes over the past few months have roiled investors and capital markets," they wrote. "Beyond the sheer complexity of reshaping the global trade order, we remain cautious of persistent regional conflicts in Eastern Europe and the Middle East and lingering geopolitical tensions in the East and South China Seas. As the chart below shows, US economic policy uncertainty has escalated since the 2024 election, largely due to the tariff turmoil, and it has recently exceeded levels seen at the peak of the 2020 - 2021 pandemic."
The analysts said that these uncertainties are expected to drive gold prices higher over the next two years.
“We believe economic uncertainties and geopolitical tensions will continue to drive ongoing gold purchases by private investors and global central banks well into 2026 (central banks alone now account for 21% of global gold demand),” they said. “Lower short-term U.S. interest rates and a mild U.S. dollar rebound should reinforce price uptrends in precious metals.”
They warned, however, that “investor optimism about precious-metals gains has reached levels that historically accompany sharp pullbacks.”
“We favor patience to buy on dips in price,” they said.
The analysts also recommend that investors focus on quality over more speculative assets, and diversify their holdings with commodities like precious metals, which have significantly outperformed the broad equity indexes.
"[T]he Bloomberg Precious Metals Subindex gained 12.1% versus a 15.8% loss in the S&P 500 Index (on a total return basis), as tariff uncertainties surged between February 19th, 2025 and April 21st, 2025,” they noted. “Precious metals may continue to hedge as tariff uncertainties persist."
Wells Fargo is projecting a mild pullback in gold prices to the $3,000 - $3,200 range by year-end, after which they expect the yellow metal to rise as high as $3,600 per ounce by the end of 2026.
