Morgan Stanley said on Friday that gold prices could rise to $4,500 an ounce by mid-2026, noting that strong physical demand from exchange-traded funds and central banks remains a key supporting factor amid continued uncertainty surrounding the global economy.
The bank added in a research note that recent price movements pushed gold into an overbought zone according to the Relative Strength Index (RSI), but the recent price correction brought the market back to more stable and healthy levels, which helped to liquidate overbought positions and restore balance to the market.
Morgan Stanley believes that the pace of gold-backed exchange-traded fund purchases will continue as interest rates trend downward, along with continued purchases by central banks, albeit at a slower pace, with demand for gold jewelry remaining stable around current levels.
Risks persist despite the momentum
Despite the general optimism, the bank warned that downside risks remain, as sharp price fluctuations could prompt investors to shift towards other asset classes, and any potential decisions by some central banks to reduce their gold reserves could put pressure on prices in the medium term.
This comes at a time when gold prices have jumped by more than 54% since the beginning of the year, recording several historic peaks during 2025, the latest of which was at $4381.21 per ounce on October 20, before falling by more than 8% after that peak.
This volatile price trajectory indicates that the market is undergoing a repositioning phase between a strong upward surge and expectations of a temporary correction, with investors' appetite for the precious metal as a safe haven continuing.
Fueling the rise and the horizon of expectations
Analysts at Morgan Stanley attribute this year's gold price surge to a combination of factors, most notably escalating geopolitical tensions, growing expectations of interest rate cuts, continued central bank purchases, and strong inflows from gold-backed exchange-traded funds.
These factors combined are expected to continue supporting global demand for gold until 2026, with the pace of momentum varying according to monetary policies and major economic shifts in global markets.
The latest analyst forecasts on gold prices for 2025 and 2026 in dollars per ounce are due to be released in the coming weeks, which will give clearer indications of the yellow metal's ability to reach Morgan Stanley's ambitious target of $4,500.
