In a new update to its global economic outlook, the American investment bank Morgan Stanley issued a highly optimistic report on the future of gold, predicting that the precious metal will continue its upward trajectory, reaching an unprecedented $4,800 by the fourth quarter of this year. This forecast surpasses the record levels achieved last year, indicating continued buying momentum in the precious metals markets.
Gold as a safe haven amid geopolitical tensions
These projections were not unfounded, but rather based on a careful reading of the global landscape. The bank indicated that recent political and economic developments in Venezuela could play a pivotal role in boosting demand for gold as the traditional "safe haven" for investors during times of uncertainty. Although the bank did not directly factor the Venezuelan situation into its pricing model, economic history consistently demonstrates that instability in resource-rich or energy-influential countries often drives capital towards tangible assets to preserve value.
The silver market and the Chinese role
Turning to the white metal, the Morgan Stanley report highlighted the dynamics of the silver market, noting that 2025 marked a pivotal turning point, representing the peak of the supply and demand deficit. The bank drew attention to a crucial factor: China's trade policies. The stringent Chinese export licensing requirements implemented at the beginning of this year have increased the risk of price volatility, potentially leading to a global supply shortage and a price surge in line with gold.
The impact of the dollar and bond yields
In daily trading and current market conditions, spot gold prices saw a notable decline of over 1%, settling at $4,450.08 per ounce. This temporary drop is attributed to the traditional inverse relationship between gold and the US dollar; the metal was affected by the rise in the dollar index and the increase in US Treasury yields. It is a well-established economic principle that higher bond yields increase the opportunity cost of holding gold, which does not generate a periodic return, thus temporarily putting downward pressure on its price.
Watching global monetary policies
This price volatility comes at a time when global financial markets are cautiously awaiting a series of influential economic data releases, as well as disclosures regarding the future monetary policy of major central banks, most notably the US Federal Reserve. Interest rate decisions are considered the primary driver of markets in the coming period, as any hint of a rate cut or monetary easing will give gold a strong boost towards the price targets set by Morgan Stanley, and vice versa.
