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Spot gold powered back above the $4,000 mark on Tuesday, rising 1.83% to trade as high as $4,087.30, while silver surged 4.29% to $58.70. The rally unfolded despite rising Treasury yields, a firmer U.S. dollar and elevated oil prices — a backdrop that would normally pressure the non-yielding metal. Against this complex mix of lingering rate risks and geopolitical turmoil, Wells Fargo and Schroders offered fresh assessments anchored in long-term risk-reward and structural central bank demand.
Sameer Samana, head of global equities and real asset strategy at Wells Fargo, argued that gold’s more than 20% correction from its January peak means investors should shift focus to the long-term risk-reward profile. He believes much of the tightening risk has already been absorbed. “Fed funds futures are pricing in two to three more hikes, and so is the gold price,” he noted, adding that the real question is whether significantly more tightening is needed. “Inflation is not such a problem that it would require aggressive extra hikes.”
Samana acknowledged that short-term technical risks remain, with a possible move down to $3,500 and resistance between $4,500 and $4,900. But Wells Fargo’s Investment Institute maintains a bullish outlook, forecasting gold to reach $5,300–$5,500 by end-2026 and $5,800–$6,000 by end-2027. “You are looking at roughly $500 of downside and around $1,500 of upside. That is a very attractive risk-reward proposition for portfolio builders,” he said. Higher oil and higher rates, he argued, will eventually slow the economy and force central banks back into easing mode. “It is just a matter of time before gold prices move higher.”
Schroders analysts noted that June saw a return of the “East buys, West sells” dynamic, with emerging-market central banks actively accumulating gold on price declines. They believe hawkish Fed expectations have been overplayed: energy-driven inflation tail risks have faded, forward inflation expectations have collapsed, and labor market data show no signs of sticky wage inflation. Meanwhile, U.S. fiscal realities — with $8–$10 trillion in Treasury rollovers and deficit financing over the next 12 months, and interest expenses already exceeding the defense budget — are severely constraining the scope for further rate hikes.
Structurally, the central bank buying story remains compelling. Poland has been an early and aggressive buyer, but China’s activity carries the strongest signaling effect. When gold traded above $5,000 an ounce in February, the People’s Bank of China reported purchases of just 2 tonnes. By June, at an average price around $4,250, monthly buying jumped to 15 tonnes — a more than sevenfold increase that reveals Beijing’s view on value. Schroders also suspects official figures understate true purchases, given China’s history of disclosing previously unreported accumulation in lump-sum statistical revisions — a rational choice amid today’s geopolitical shifts.
On a long-term view, Schroders calculates that at $4,200 per ounce, China’s gold reserves account for only 8.3% of total reserves. Raising that share to 30% would require purchasing 15 tonnes a month for another 33 years, all else being equal — a runway that suggests emerging-market central bank demand can underpin gold prices for decades to come.
