LIVE MARKETS-Gold has been quite a story, but here's how the next chapters read to WFII

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GOLD HAS BEEN QUITE A STORY, BUT HERE'S HOW THE NEXT CHAPTERS READ TO WFII

Gold XAU= has shined bright in 2025. It advanced more than 65% to its October 19 record intraday high of $4,381.21. With this, measures of investor optimism toward the yellow metal, such as fund flows, futures positioning, and overbought readings, were at extreme levels.

In fact, gold traded at more than 30% above its 200-day moving average, a threshold that has been exceeded only one other time in the past 40 years.

As Austin Pickle, investment strategy analyst at the Wells Fargo Investment Institute (WFII), sees it, gold was historically extended.

From its October 19 record intraday high to its October 27 intraday low, gold sold off more than 11%, which WFII believes was a much-needed and healthy consolidation. The price now stands around $4,115.

"It can take time to shake out those excesses from the system. It would be unsurprising if the price of gold chops around in the coming months before taking the next leg higher," writes Pickle in a note.

In Pickle's view, there has been no change in the gold story because it remains the primary outlet for investor concerns over government debt, geopolitical risks, economic uncertainty, and inflation, among other factors, while central bank and investor demand should remain strong.

In terms of a target, WFII forecasts gold to reach $4,500-$4,700 by year-end 2026.

(Terence Gabriel)

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