Sameer Samana, Head of Global Equities and Real Assets Strategy at Wells Fargo, stated that gold's risk-reward profile has shifted in investors' favor after the metal corrected more than 20% from its January record high. In an interview with Kitco News, Samana explained that much of the downside risk from potential Federal Reserve rate hikes has already been reflected in current prices below $4,100 an ounce, as Fed funds futures embed two to three hikes. Gold has struggled for months as Middle East tensions drove oil prices higher and fueled rate-hike expectations, increasing the opportunity cost of holding non-yielding assets, but Samana argued that markets have become overly pessimistic given limited odds of significantly more tightening beyond what is already priced in.
Samana Identifies $3,500 Downside Risk and $4,500–$4,900 Resistance Levels
Samana acknowledged that the technical picture has yet to improve and cautioned that the correction may not have fully run its course. "It's hard to argue that gold has bottomed," he said, noting that near-term risk exists to the downside at $3,500. He also identified technical resistance likely to emerge between $4,500 and $4,900 as investors who bought near the highs look to exit losing positions. Despite these risks, Samana emphasized that the longer-term macroeconomic cycle remains intact. "When the dust settles, you'll be back to much of the same," he said, explaining that higher oil prices and higher interest rates will slow the economy and prompt central banks and fiscal authorities to cut rates and provide additional monetary support. "Could you see $3,500 before $4,500? It's possible," he said. "But unless you believe that longer-term cycle is over, then it really is just a matter of time before gold prices are higher."
Gold Historically Limited Drawdowns During Recessions to 15%–34%
Samana noted that gold has historically held up relatively well during economic downturns compared with many other asset classes. Looking at recent recessions and periods of aggressive monetary tightening, he pointed out that gold experienced drawdowns of roughly 15% during the 2020 recession and the Fed's tightening cycle in 2018, while the 2008 financial crisis produced a decline closer to 34%. He added that prolonged bear markets in gold typically unfold over several years rather than in sharp collapses. Because gold has already corrected nearly 30% from its peak, Samana believes much of the potential damage has already been absorbed. "I think a lot of the pain has already been discounted in the price," he said. He emphasized that gold continues to provide valuable diversification because it often performs well when traditional assets struggle. "This is an asset that does not work in every environment," he said. "But when stocks don't work and bonds don't work, there's a really good chance that gold is working."
Wells Fargo Forecasts Gold at $5,300–$5,500 by End of 2026
Samana's comments align with the latest research from Wells Fargo Investment Institute, which argues that the recent correction has not changed its longer-term bullish outlook. In its latest "Chart of the Week," the firm stated that gold's decline has been driven primarily by profit-taking and rising expectations for Fed tightening as higher real yields temporarily reduced gold's relative appeal. The institute expects that relationship to stabilize if energy and supply-chain pressures begin to ease. The report notes that structural drivers supporting gold remain firmly in place, including continued central bank purchases, reserve diversification, and persistent geopolitical uncertainty. Wells Fargo reiterated its long-term forecast for gold to reach $5,300 to $5,500 an ounce by the end of 2026, with prices climbing to $5,800 to $6,000 an ounce by the end of 2027. Samana stated that if investors look out 18 months to the end of 2027, a reclaiming of the highs with the possibility of new highs is very real. "So you give me $500 of downside and roughly $1,500 to the upside. As an investor building portfolio exposure, I think that's a very attractive risk-reward proposition," he said.
FAQ
What did Sameer Samana say about gold's risk-reward after the correction from January highs?
Sameer Samana, Head of Global Equities and Real Assets Strategy at Wells Fargo, stated in an interview with Kitco News that gold's risk-reward profile has shifted in investors' favor after the metal corrected more than 20% from its January record high. He explained that much of the downside risk from potential Federal Reserve rate hikes has already been reflected in current prices below $4,100 an ounce, as Fed funds futures embed two to three hikes.
What are Wells Fargo's long-term price forecasts for gold?
Wells Fargo Investment Institute reiterated its long-term forecast for gold to reach $5,300 to $5,500 an ounce by the end of 2026, with prices climbing to $5,800 to $6,000 an ounce by the end of 2027. The firm maintains a bullish outlook based on structural drivers including continued central bank purchases, reserve diversification, and persistent geopolitical uncertainty.
How did gold perform during past recessions according to Samana?
Samana noted that gold experienced drawdowns of roughly 15% during the 2020 recession and the Fed's tightening cycle in 2018, while the 2008 financial crisis produced a decline closer to 34%. He emphasized that prolonged bear markets in gold typically unfold over several years rather than in sharp collapses, and that much of the potential damage from the current correction has already been absorbed.
