The downward revision is notable less for the direction, which follows a genuinely difficult five month stretch for gold, than for the fact that Wells Fargo is cutting targets even while reiterating a favourable overall stance on precious metals. That combination suggests the bank sees the current rebound, gold's strongest weekly gain since January in the first week of August, as real but insufficient to fully offset the drag from elevated US real yields, which it identifies as the core headwind since March. The regional divergence flagged in the note, gold down 5% globally in the first half but up 13% when measured through Asian trading hours, points to a market where international and central bank demand is doing the heavy lifting against a structurally less supportive US monetary backdrop. For positioning purposes, the bank's framing implies further gains are likely but uneven, with US rate expectations remaining the swing factor determining how closely gold tracks the top or bottom of its revised ranges.---Earlier:Gold nears $4,500 resistance as central bank buying meets fading Fed hike bets---Wells Fargo is trimming how high it expects gold to climb without giving up on the trade itself, betting resilient Asian and central bank demand keeps outweighing the drag from elevated US real yields.Summary:Wells Fargo Investment Institute cut its 2026 year-end gold target to $4,900-5,100 an ounce, down from $5,300-5,500The bank also lowered its 2027 target to $5,400-5,600 an ounce, down from $5,800-6,000Gold rose more than 7% in the first week of August, its strongest weekly gain since January, aided by hopes for Middle East negotiation progress and scaled back Fed rate hike expectationsETF outflows have stabilised and begun reversing higher after a difficult five month stretch for gold since MarchRising US inflation adjusted yields and concerns the Fed may need to raise rates have weighed on gold, which pays no interest to holdersGlobal aggregate demand held up reasonably well in the first half of 2026, led by international investors amid geopolitical uncertainty and relatively low rates in markets such as ChinaGold's global spot price fell 5% in the first half, but the metal was up 13% when measured specifically during Asian trading hoursWells Fargo says these dynamics reinforced gold's role and supported a rebound in central bank purchases during the second quarterThe bank remains favourable on precious metals but expects gold's path higher to be uneven given ongoing US monetary headwindsWells Fargo Investment Institute has lowered its year-end gold price targets, cutting its 2026 forecast to $4,900-5,100 an ounce from $5,300-5,500 previously, and its 2027 forecast to $5,400-5,600 an ounce from $5,800-6,000. The revision comes even as the bank maintains a broadly favourable outlook on precious metals, framing the cut as a recalibration rather than a change of view.The bank describes gold as regaining momentum after a challenging five month stretch, supported by hopes for progress toward Middle East negotiations and by investors scaling back expectations for further Fed rate hikes. Gold prices rose more than 7% in the first week of August alone, the strongest weekly gain since January, while exchange traded fund flows have also improved, with outflows stabilising and beginning to reverse higher.Wells Fargo attributes gold's weakness since March largely to rising US inflation adjusted yields and concerns that persistent inflation could push the Fed toward further rate increases, both of which make non interest bearing bullion relatively less attractive against interest bearing assets. Despite that headwind, the bank argues several underlying strengths have persisted beneath the surface. Aggregate global demand held up reasonably well through the first half of 2026, with international investors particularly constructive amid heightened geopolitical and market uncertainty, inflation risk, and comparatively low interest rates in select markets including China.The regional divergence in performance is stark. While gold's global spot price fell 5% in the first half of the year, Asian investors were persistent buyers throughout, and gold's price measured specifically during Asian trading hours was actually up 13% over the same period. Wells Fargo believes the same geopolitical and market uncertainties driving that Asian demand also reinforced gold's traditional safe haven role and supported a rebound in central bank purchases during the second quarter.Looking ahead, the bank says these underlying strengths support its continued favourable view on precious metals, but expects gold's path higher to remain uneven as international demand contends with ongoing headwinds from US monetary policy. That combination, constructive on the asset class overall but wary of a smooth ride to the top of its range, is what ultimately drove Wells Fargo to trim both its 2026 and 2027 targets while stopping short of turning cautious on gold altogether. ---Wells Fargo Investment Institute (WFII) is the in-house investment research and strategy arm of Wells Fargo's Wealth & Investment Management division, formed in 2019 by combining the research, strategy, and manager research teams from across the bank's wealth, brokerage, and retirement businesses into a single unit. It's a registered investment adviser and wholly owned subsidiary of Wells Fargo Bank, N.A.. Its output includes regular strategy reports and annual outlooks rather than public-facing trading calls, positioning it closer to a house view for Wells Fargo's wealth management clients than a sell-side research desk. This article was written by Eamonn Sheridan at investinglive.com.