Morgan Stanley Sees Gold Breaking Through $5,000 by 2027

Gold prices may be facing pressure at present, but they are not expected to remain low for long. Amy Gower, head of metals and mining strategy at Morgan Stanley, believes that gold will break through $5,000 per ounce by the second half of 2027. In an interview with CNBC, Gower acknowledged that the current environment is challenging for gold due to high bond yields, dollar strength, and oil price increases.

Gower pointed out that while gold positioning has increased, many investors added to their positions at close to current levels, which means they will be quickly sold off in a market downturn. However, she noted that gold seems to be finding support above $4,000, and physical demand from central banks such as China and Poland remains strong.

Gower also attributed the recent selling to algorithmic trading funds, which have been flipping their positions repeatedly. She believes that exchange-traded funds (ETFs) have been adding to gold, despite the market anticipating Fed rate hikes, and that some central banks may slow their purchases but ultimately return with a pullback.

Regarding silver, Gower disagreed that its recent run-up was driven solely by hype. She noted that there is real physical demand for silver, particularly from solar panels and ETF buying. While gold prices may face pressure in the near term, Morgan Stanley sees further gains in the months ahead.