Gold Price Could Reach $8,000 By 2027, Says Wells Fargo — Here's The Key Driver

Gold prices were hovering around $4,796 per ounce early Thursday, but Wells Fargo modelled a bull case scenario predicting the precious metal's price surging to $8,000 per ounce by the end of 2027.

Gold prices have rallied hard since last year until the onset of the Middle East war in late February, with gold futures falling nearly 11% in March—their worst monthly decline since June 2013. However, Wells Fargo believes the ongoing debasement trade of central banks selling fiat currencies for an alternative safe haven could buoy gold prices to new highs.

'We're in the 4th debasement cycle that started in 2022,' wrote Wells Fargo strategist Ohsung Kwon. 'Following the recent pullback, gold is now closer to our model's fair value of $4,500, and all three drivers are likely to suggest further debasement from here.'

The strategist highlighted that four out of five economic scenarios indicate further debasement. However, Wells Fargo's bear case sees gold prices declining to $4,000 by the end of 2027. Kwon used the M2/gold ratio, where M2 is the US money supply divided by the price of an ounce of gold, to identify that the current debasement cycle was triggered in 2022, the same year Russia invaded Ukraine and the US began hiking its interest rates, which led central banks to increase their gold holdings.

Prior debasement cycles for were observed during the Great Depression, when President Richard Nixon ending the dollar's convertibility to gold, and even during the wars and the recessions of the early 2000s. Kwon explained that debasement cycles last 8.5 years on average, and we are not even halfway through the current cycle, with only 3.5 years in.

Ray Dalio Links Gold Rally to Declining Dollar Value

Bridgewater Associates founder Ray Dalio has been issuing multiple warnings related to the US economy amid record debt levels and the devaluation of fiat currencies.

While markets believe factors like central banks buying gold, geopolitical clashes, and individual investors piling on the precious metal were the only reasons that pushed gold prices to an all-time high, Dalio said in a January X post that the gold rally was primarily a result of fiat currency losing real value.

'The best major investment of the year was long gold (returning 65% in dollar terms), which outperformed the S&P index (which returned 18% in dollars) by 47%. Or, said differently, the S&P fell by 28% in gold-money terms,' Dalio wrote.

Dalio urged investors to account for factors when assessing the forces that influenced markets in 2025. He thinks evaluating investments using calculations made in a depreciating currency could be inaccurate, as it can make returns look like they were stronger than they actually were.

Dalio said a weaker currency typically lowers the cost of a country's exported goods for global buyers but hikes the price of domestic imports.

'When one's currency goes down, it reduces one's wealth and one's buying power, it makes one's goods and services cheaper in others' currencies, and it makes others' goods and services more expensive in one's own currency,' he concluded.

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