(Kitco News) – Strong central bank purchases, ongoing U.S. dollar depreciation, additional Fed rate cuts, and continued geopolitical uncertainty will propel gold prices beyond their current levels to new all-time highs in 2026, according to Wells Fargo.
In their 2026 Outlook, published this week, Wells Fargo analysts said they believe gold will be among the few standout performers in the commodities complex next year.
“We expect further price gains in both Precious and Industrial Metals during 2026, but rising crude oil supplies should restrain overall commodity returns for the year,” they wrote, adding that they maintain a neutral commodity outlook for the year.
“We view the easing of financial conditions and improving macro environment through 2026 as positive tailwinds for modest broad performance,” the analysts said. “We retain a neutral rating on the commodity complex because we believe that headwinds in an oversupplied energy market will limit overall performance.”
Gold, however, has further upside in the coming year — even after a standout performance in 2025.
“We remain constructive on gold’s (and Precious Metals’) uptrend through 2026,” they wrote. “Recent conditions have been ripe for gold outperformance as global demand growth has been fueled by heightened central-bank purchases, U.S. dollar depreciation, Fed interest-rate cuts, and geopolitical uncertainty.”
Wells Fargo analysts expect many of these tailwinds will continue in 2026, which in turn will enable gold prices to continue their outperformance, though at a slower pace than in 2025.
“Central banks continue to play a pivotal role in gold’s rally, and many of the initial concerns that sparked purchases persist, such as inflation and diversification amid geopolitical risks, they said. “Additionally, our expectation for additional Fed rate cuts and a stable U.S. dollar could drive further gains and be tailwinds for demand growth in exchange-traded funds.”
“As seen in the chart below, past Fed easing cycles have been a strong driver of gold’s performance over the following 18 months,” they noted.
Among their key investment ideas for 2026, they suggest investors adjust their portfolio positions to take advantage of lower near-term interest rates.
“Overall, the monetary backdrop supports income generation and selective risk-taking with implementation focused on quality across asset classes to preserve capital while positioning for a growth recovery,” they said. “Commodities, especially gold and precious metals, may offer capital preservation, in our view, amid ongoing geopolitical and inflation risks and given our outlook for a stable U.S. dollar and unrelenting central-bank demand.”
Wells Fargo commodity analysts project gold will gain an additional 5.8% to 10% next year, with prices finishing between $4,500 and $4,700 per ounce.
In an exclusive interview with Kitco News published last week, Wells Fargo Investment Institute head of Global Equities and Real Assets Sameer Samana said falling rates, high uncertainty, the weakening dollar and the crypto pullback are all contributing to a very strong setup for the next phase of the gold rally, and the multi-year gold price rally remains intact.
“Nothing is damaged with respect to the uptrend,” he said. “Now, that doesn't mean that you couldn't have some further consolidation. It's entirely possible that the Fed at the December meeting – we think they'll cut – but it's possible they wait until January. But either way, they will be cutting.”
Samana said the Fed will become more dovish as Trump continues with his appointments, particularly when Powell’s successor is named, which could be as early as December. “Right now, it looks like Kevin Hassett is a front runner,” he said. “Obviously, markets will start paying more and more attention to his commentary, which I imagine will probably end up looking a lot like Governor Miran's commentary, and he'll probably want rates somewhere down in the twos.”
He said this will reduce one of the main headwinds for gold: the opportunity cost of holding a non-yielding asset. “As rates come down, especially real interest rates, that’ll put a little bit of a bid under gold.”
Samana said it will likely also lead to another round of weakness in the U.S. dollar.
“[The dollar index] fell almost 15% from 110 all the way down to 96, and, you've only been able to manage a 3% to 4% rally. That's very negative, the fact that the dollar fell that far and fast. The dollar over the next 12 to 15 months, probably starts to stall out, or at the very worst for gold, goes sideways,” he said.
“We don't see a lot of dollar strength from here.”
Samana is also seeing an ongoing and broad-based diversification trend across markets, which he believes will further boost gold prices.
“In this world where there's a lot of uncertainty, people are looking more and more for sources of diversification that maybe bonds used to provide,” he said. “It seems like gold is the key diversifier in a world where inflation remains perky and the Fed cuts rates with inflation at 3%.”
Another factor that Wells Fargo sees boosting gold prices going forward is a relative weakening of some of the yellow metal’s strongest competitors: AI-led equities and crypto.
“I think a lot of the flows into the U.S. were due to higher interest rates, relative stability in an uncertain and unstable world,” Samana said. “You could also argue the AI’s performance was a big part of the reason why people would turn other currencies into dollars and turn around and buy those equities. But a lot of those have either been rolled back or weakened.”
“AI now is a global play,” he added. “You're almost as likely to buy Taiwanese equities, or Korean equities, or Chinese equities as you are U.S. [equities], because things have shifted in terms of what's being built out with respect to AI. You could argue that the U.S. now is almost as uncertain a place to invest as some other developed markets, given some of the political changes.
Samana believes global equities – and AI equities in particular – are too closely correlated to deliver true diversification.
“I think investors are saying, ‘Look, there's just so much tail risk that's so hard to quantify, it can't be the old playbook of just buying equities in various parts of the world. It has to be something non-equity like.’”
For much of gold’s ongoing rally, Samana said crypto was also attractive from a diversification and performance standpoint, but that’s no longer the case. “I think Bitcoin filled that niche, but in this most recent kind of six to 12 months, even that's falling back. It really does seem like it's gold that's stood the test of time.”
One other metric that Samana thinks is flying under the radar is that gold has actually been outperforming the hot stock market for years now.
“I think what's really interesting is, if you look at the S&P in gold terms, we peaked in late 2021,” he said. “You're now four years into a relative trend of stocks versus gold. I think that's lost on a lot of people.”
“We sometimes have a difficult time getting people to allocate to commodities,” Samana said. “What I would tell people is, at a high level, the whole complex is a great diversifier, [but] if you zoom in to the gold piece of it, it's been a really strong performer – and again, over a not-insignificant amount of time now.”
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