Morgan Stanley Pins Gold Floor at $4,000 Amid Debt Concerns
Morgan Stanley has identified $4,000 as a strong floor for gold. According to Amy Gower, Morgan Stanley's head of metals and mining strategy, this level is supported by three factors: steady central bank and Chinese buying, growing unease over long-term government debt that could lead to intervention in the bond market, and a possible drop in oil prices if Middle East tensions ease.
Gower still favors gold on a 12-month view despite its roughly 10% slide over six months. She notes that elevated bond yields remain gold's biggest competitor, as bullion pays no interest.
Meanwhile, silver has added about 0.8% and is holding its gains more comfortably than gold, which is sitting near its opening price. The World Gold Council's flow data shows that global gold-backed ETFs pulled in $18 billion in August, the second-highest monthly haul on record.