Gold price forecasts up to the second quarter of 2027: WisdomTree estimates $4,563 per ounce

Following the correction in the first half of 2026, the valuation premium accumulated during the 2025–26 rally has been reabsorbed. According to Nitesh Shah, gold prices are once again driven by inflation, interest rates and the US dollar.

The report, authored by Nitesh Shah, Head of Commodities and Macroeconomic Research at the firm, was drafted in early July 2026 and published on 14 July. The central argument is that the first-half correction has brought prices back close to the fair value estimated by the firm’s proprietary model, and that the next market phase will be driven by macroeconomic fundamentals rather than extraordinary demand from new buyers. The estimate is derived from applying Bloomberg’s consensus forecasts for inflation, Treasury yields and the US dollar’s performance to the model.

The reset in gold prices following January’s record high

Gold reached an all-time intraday high of $5,595 per ounce on 29 January 2026, before correcting sharply in the following months. At the time of writing, prices were below their levels at the start of the year.

WisdomTree describes this as “a healthy correction and not the end of the structural bull market”. The analysis identifies three factors behind the correction.

The first is the appointment of Kevin Warsh as Chair of the Federal Reserve, which has restored market confidence in the independence of US monetary policy. Fears of a more politically motivated appointment by the White House had fuelled a risk premium in prices, a factor that has now largely dissipated. Warsh was appointed at the end of January 2026, confirmed by the Senate on 13 May with 54 votes in favour and 45 against, and was sworn in on 22 May, succeeding Jerome Powell.

The second factor is the outbreak of hostilities with Iran, which initially triggered selling pressure on gold. Traders used the metal as a liquid asset to raise cash and meet emergency hedging requirements. The report notes that geopolitical tensions support prices in the medium term, but that acute liquidity shocks can temporarily produce the opposite effect.

The third factor is the slowdown in demand from the new structural buyers who had driven the previous rally: inflows into Chinese and Indian ETPs have slowed and, according to the firm’s estimates, Tether’s accumulation of gold has also decreased significantly.

The valuation premium on gold has been reabsorbed

In previous outlook reports, WisdomTree had highlighted the gap between the fair value estimated by its model and the observed market price, attributing it to buying pressure from a new category of investors: Asian investment vehicles and Tether, with volumes sufficient to push prices beyond levels justified by traditional macroeconomic fundamentals.

With the correction in the first half of 2026, that premium has almost entirely been absorbed. The firm believes that prices may diverge from fundamentals even for prolonged periods, but that the extent of the valuations characteristic of the 2025–26 rally has essentially been wiped out.

This shift has a specific operational implication. Future returns will no longer depend on a further expansion of valuation multiples, but on the evolution of macroeconomic variables.

Inflation, interest rates and the Fed: a return to fundamentals

In the short term, gold could be affected by the markets’ repositioning in response to the outlook for US monetary policy. The Federal Open Market Committee’s projections and subsequent statements have been interpreted as signalling a more hawkish Fed, prompting the futures markets to price in an initial rate rise as early as September. WisdomTree considers this repositioning to be excessive.

This view is based on two factors. If the memorandum of understanding between the US and Iran remains in place and tensions ease, pressure on the energy sector should subside, reducing inflationary pressures. Furthermore, the labour market appears less robust than estimated in the FOMC’s latest projections: the non-farm payrolls data showed more modest employment growth, with downward revisions for previous months.

The data published on 2 July by the Bureau of Labour Statistics confirms this assessment. In June, non-farm payrolls rose by 57,000, against consensus expectations of between 110,000 and 114,000. April’s figure was revised down from 179,000 to 148,000 and May’s from 172,000 to 129,000, representing an overall downward revision of 74,000 jobs. The unemployment rate fell from 4.3% to 4.2%, but this decline is attributable to a fall in the labour force participation rate, which dropped from 61.8% to 61.5%.

A Bloomberg survey of professional economists forecasts a decline in US PCE inflation from around 3.9 per cent in the second quarter of 2026 to around 2.2 per cent by the second quarter of 2027. Should this scenario materialise, the macroeconomic environment would be more favourable to gold than current market assessments of monetary policy suggest.

The dollar remains the key factor

WisdomTree’s attribution analysis attributes much of gold’s weakness in 2026 to the strengthening of the US dollar. The currency benefited from the US’s relative energy security during the conflict in Iran, outperforming many other traditional safe-haven currencies.

Market data quantifies the movement. The Dollar Index reached 101.8 at the end of June, a thirteen-month high, having risen by around 3 per cent since the start of the year and 5 per cent since the end of January. On 21 July, the index stood at around 100.9.

The firm believes that, should geopolitical tensions ease and energy markets normalise, some of this support would fade. In the medium term, the structural factors favouring depreciation remain in place, in particular the persistent budget and current account deficits.

Structural demand: Asian ETPs and Tether purchases

The pace of purchases by the main new market players has slowed significantly.

In China, demand for ETPs had accelerated following the green light for insurance companies to invest in gold. Flows slowed in the second half of 2025, picked up again at the start of 2026 and turned into net outflows from May onwards. In India, demand had increased following reforms allowing pension funds to include gold in their portfolios, before subsequently moderating.

A similar trend emerges from WisdomTree’s estimates of Tether’s purchases, based on the company’s quarterly audit reports and LBMA prices:

This pool of buyers remains a structural support factor in the long term, but the pace of accumulation that had fuelled the valuation premium has clearly slowed.

Gold ETF flows: the World Gold Council’s picture

Data from the World Gold Council on listed physical products completes the picture of investment demand. In June, gold ETFs recorded outflows of $8.9 billion, with all geographical regions in negative territory. North America lost $5.5 billion, Asia $2.3 billion — the region’s worst month on record — and Europe $818 million. India was one of the few exceptions, with inflows of $388.5 million.

Global assets under management fell by 13 per cent month-on-month to $526 billion, and total physical reserves decreased by 74 tonnes to 4,047 tonnes.

The half-yearly picture remains positive, however. In the first half of 2026, gold ETFs saw net inflows of $8 billion and total reserves increased by 18 tonnes. Asia recorded its best-ever first half-year with inflows of $12 billion; Europe saw inflows of $3.2 billion, whilst North America was the only region to experience outflows, totalling $7.7 billion – its worst start to the year since 2013. The 6 per cent decline in assets under management over the half-year reflects the fall in price, not a withdrawal of investor confidence.

In terms of institutional positioning, the World Gold Council notes that, at the end of June, net long positions on COMEX rose by 16 per cent month-on-month to 538 tonnes, the highest end-of-month level since January 2026.

Positioning and technical outlook

WisdomTree observes that investor positioning appears less rigid than at the start of the year. Net speculative positions in gold futures on COMEX remain subdued compared with recent peaks.

From a technical perspective, the firm believes prices appear set to consolidate a base after completing a move beyond the 38.2% Fibonacci retracement level. A recovery in sentiment could provide a further catalyst should the macroeconomic outlook become more favourable.

The model: $4,563 per ounce by the second quarter of 2027

By incorporating Bloomberg’s consensus forecasts for inflation, Treasury yields and the US dollar into the model, and assuming that net speculative positions stabilise at around 150,000 contracts, WisdomTree arrives at an implied value of $4,563 per ounce by the second quarter of 2027.

The consensus variables used are as follows:

This target implies a recovery of more than $500 per ounce from the levels seen at the end of June 2026, when gold closed the half-year just above $4,000. It remains, however, around 18 per cent below the all-time intraday high recorded in January.

Sensitivity analysis instead of bull and bear scenarios

WisdomTree has moved away from traditional bull and bear scenarios in favour of a series of sensitivity analyses built around the central forecast. The stated reason is the unusually uncertain macroeconomic environment: this approach allows the reader to calibrate the model to their own assumptions regarding inflation, interest rates, the US dollar and positioning, whilst keeping the other variables constant.

The published tables cross-reference four variables: 10-year nominal yields, the DXY index level, the CPI inflation rate and net speculative positions. The example given in the document illustrates the range of possible deviations: with the dollar appreciating to 104 and 10-year nominal yields at 5.24 per cent, assuming inflation remains at 2.2 per cent and speculative positions at 150,000 contracts, the model would imply a gold price of around $4,209 per ounce.

A comparison with the previous estimate and with other institutions

The revision compared with the previous outlook is substantial. In the update published in May, with a time horizon to the first quarter of 2027, the consensus scenario indicated $5,493 per ounce, based on assumptions of 2.8% inflation, 10-year yields at 4.13%, the DXY at 96.3 and net speculative positioning at 200,000 contracts. The new estimate is therefore around $930 lower, representing a reduction of approximately 17 per cent, and reflects more conservative assumptions regarding inflation, the dollar and investor sentiment.

This downward revision is consistent with the direction taken by other investment houses. On 19 June, Goldman Sachs cut its end-2026 target from $5,400 to $4,900 per ounce, citing the delay in the Fed’s first rate hike and weaker demand from gold ETFs as reasons for the revision.

The market environment following the publication

The report’s central assumption — that the memorandum of understanding between the United States and Iran would hold and that tensions would gradually ease — has been put to the test by events in recent weeks. The document phrased this assumption in explicitly conditional terms.

The memorandum had been signed in mid-June and provided for a ceasefire, the reopening of the Strait of Hormuz and a 60-day window for negotiations. The ceasefire subsequently broke down. On 19 July, the US military carried out further raids against Iranian targets – the ninth consecutive day of attacks – following the deaths of three American servicemen over the weekend; Tehran declared the ceasefire effectively over. On 20 July, according to the Italian press, Brent crude rose back above $90 a barrel, before falling again on news of a possible new ten-day ceasefire proposed by Qatar.

The outlook for interest rates moved in the opposite direction to that indicated in the report. On 17 June, the Fed left rates unchanged at 3.50%–3.75%, with projections pointing to a possible rise by the end of the year. On 21 July, the markets were pricing in a probability of around 55 per cent of a rate rise in September and close to 80 per cent for December. US consumer price inflation stood at 4.2 per cent in May – the highest since April 2023 – driven by the energy shock linked to the conflict.

Gold reacted modestly to the escalation. On 20 July, spot prices stood at around $4,010 per ounce, near nine-month lows, within the $4,000–$4,100 range that has characterised recent weeks. The metal remains, however, up by around 18% year-on-year. Compared with current levels, the target of $4,563 implies a recovery of around 14%.

Conclusions

The WisdomTree report describes a gold market that has completed a phase of valuation normalisation. The premium that had fuelled much of the 2025–26 rally has been reabsorbed, and prices have returned to line with the model’s fair value estimates. This reduces the scope for sentiment-driven rallies and shifts the focus of the analysis to inflation, interest rates and the US dollar.

Based on consensus forecasts, the model projects a recovery towards $4,563 per ounce by the second quarter of 2027. The firm itself notes that sensitivity analysis shows how alternative macroeconomic scenarios could significantly alter this trajectory: a shift of around seven points in the DXY and nearly one percentage point in 10-year yields is enough to shift the estimate by over $350.

The two variables to monitor in the coming months are the trajectory of US monetary policy, with the FOMC meeting scheduled for 29 July, and developments in the Middle East conflict, which continues to affect energy prices and, consequently, inflation expectations. In terms of fund flows, the first half of the year ended with positive net inflows for gold ETFs despite a negative June, a sign that investment demand has moderated without reversing.