03:34 PM EDT, 09/09/2024 (MT Newswires) -- The S&P 500 is not expected to hit "meaningful new highs" in the coming months amid factors like the uncertainty tied to the upcoming US presidential election and geopolitics in the Middle East, Wells Fargo Investment Institute said Monday.

The benchmark equity index was up 0.9% at 5,457.6 in Monday late-afternoon trade and has risen 14% so far this year. The index saw a 10% rally from Aug. 5 to Aug. 30 as macro data pointed more toward a soft landing than a hard one and US Federal Reserve Chair Jerome Powell indicated that policymakers were set to start reducing interest rates, Wells Fargo Investment said in a note to clients.

"This recovery is even more remarkable given that almost none of the concerns that bothered markets just a few weeks ago have gone away," the firm wrote.

"We still have high levels of uncertainty around geopolitics in the Middle East, the upcoming neck-and-neck US elections, the cooling global economic outlook, and increasing doubts about the near-term prospects for artificial intelligence," Wells Fargo Investment said.

The situation offers dynamic investors a chance to rebalance portfolios and reduce risk assets in line with the firm's recommended allocations. Wells Fargo Investment's "unfavorable" areas include emerging-market equities and the consumer discretionary, real estate, consumer staples, and utilities sectors, according to the note.

The precious metals sector has seen tailwinds from continued economic uncertainties, elevated geopolitical risks and clarity around the potential monetary policy easing by the US central bank. Gold, in particular, has outperformed silver since global central banks started ramping up the yellow metal's purchases in 2022, Wells Fargo Investment said. The outperformance has totaled 16% as of Sept. 3.

Over the last year, central banks have bought 1,053 metric tons of gold, almost double the amount purchased in 2021, according to the firm. "Looking into 2025, we believe that many of these same trends will remain intact -- we expect the precious metals sector to continue outperforming, with gold continuing to best the other precious metals," it wrote.

Wells Fargo Investment's price target range for gold remains at $2,400 to $2,500 per troy ounce for the end of 2024. It pegs between $2,500 and $2,600 for next year, according to the note.

Wells Fargo Investment is a unit of a bank affiliate of Wells Fargo ( WFC ) .