Investment bank Morgan Stanley has stated that gold has reached its target for the fourth quarter earlier than expected and forecasts that the metal will rise above five thousand dollars per ounce next year, although it has warned that the path is unlikely to be smooth. Analyst Amy Gower noted that gold reached the fourth‑quarter forecast of $4,450 per ounce faster than expected, and the bank sees a path to a price above $5,000 per ounce in 2027, but with the possibility of volatility.

The bank stated that the reduced perceived likelihood of a Federal Reserve rate hike revived demand for exchange‑traded funds: seventy metric tons were added in July and August after an outflow of ninety‑three tons in May and June. Morgan Stanley economists expect the Fed to keep rates unchanged until 2026. Central banks have also used lower prices to replenish their reserves: China has added sixty tons since the beginning of this year, which is the largest volume since 2023, and Poland has added eighty‑two tons, increasing its reserves to 632 tons and approaching the target of 700 tons.

Morgan Stanley noted that gold has begun to move away from long‑term real yields, showing growth in early August, even though long‑term yields remained unchanged. According to the bank, the metal appears to be assessing the fiscal issues behind the higher yield more than the yield level itself, while reports about the intensification of the plan to buy back Treasury bonds provide additional support. Analysts have identified upcoming inflation data in the United States and short positions on the COMEX exchange, which are close to the lowest level since April 2020, as risks, leaving less room for further covering of short positions.

***

The material was prepared solely for informational and educational purposes and does not constitute financial advice or a recommendation.