Morgan Stanley Flags $4,000 Gold Floor Amid Central Bank Buying

Morgan Stanley's metals strategist Amy Gower sees $4,000 as a strong floor for gold prices after its recent selloff. The strategist told CNBC that three factors could keep gold supported: persistent physical demand, lower long-term bond yields, and declining oil prices that ease inflation pressure.

Physical buying is the first pillar of Morgan Stanley's bullish case. Central banks bought a net 23 metric tons of gold in July, while China alone added around 20 tons. Chinese gold imports exceeded 1,000 tons during the first eight months of 2026, putting demand on pace for its strongest year since at least 2017.

The strongest obstacle to higher gold prices is still the bond market. The U.S. 10-year Treasury yield recently surged above 5.3%, making interest-bearing government debt more competitive with gold. Gower's second bullish scenario depends on long-term yields eventually retreating, which could happen if oil prices decline and reduce inflation expectations.

Morgan Stanley previously lifted its 2026 forecast to $4,400 based on central-bank purchases, ETF buying, and macro uncertainty supporting demand.