Gold heads for 5% weekly gain on dollar, debt jitters

Gold at $4,547 per ounce, up $52, heads for a nearly 5% weekly gain as a weaker dollar and U.S. debt fears revive demand.

"Gold is regaining momentum, supported by hopes for progress toward negotiations in the Middle East and by investors scaling back expectations for Fed rate hikes," strategists at Wells Fargo Investment Institute wrote in a report.

Gold rose more than 7% during the first week of August, the strongest weekly gain since January, according to Wells Fargo. The metal's global spot price fell 5% through the first half of 2026, yet Asian investors remained persistent purchasers, with gold up 13% during Asia's trading hours. Central bank purchases rebounded in the second quarter, the bank said.

Wells Fargo reiterated a favorable outlook for the precious-metals complex, targeting $4,900-5,100 per ounce by end-2026 and $5,400-5,600 in 2027. Gold last traded above $4,900 in January before correcting more than 20% from its record.

Wells Fargo Sees $4,900-5,100 by Year-End

The bank's strategists acknowledged the path higher will be uneven. "International demand is challenged by U.S. monetary headwinds," they cautioned, while keeping a favorable stance on the complex as a whole. Sameer Samana, Wells Fargo's head of global equities and real assets strategy, said the risk-reward has "flipped quite a bit since the peak," with much of the downside already reflected in prices.

Downside Risk to $3,500 Remains

Samana warned the technical picture has yet to improve. "It's hard to argue that gold has bottomed," he said, flagging potential downside to $3,500 in the near term. Technical resistance is likely to emerge between $4,500 and $4,900 as investors who bought near the highs look to exit losing positions. He argued that higher oil prices and interest rates will eventually slow the economy, prompting central banks to cut rates again and support gold.

Gold's rebound this week follows a second-quarter slump driven by rising U.S. inflation-adjusted yields, which made the non-yielding metal less attractive against interest-bearing assets. The metal's gains have also been supported by renewed concerns over U.S. fiscal sustainability, with the dollar weakening against major currencies. In India, MCX gold October futures held near Rs 1,60,900, with the relative strength index near 71, an overbought reading.

This article is for informational purposes only and does not constitute investment advice.