- Gold prices have increased nearly 50% in 2025, reaching record highs above $4,000 per ounce.
- Morgan Stanley raised its gold price forecast to $4,400 per ounce by the end of 2026.
- The gold rally is driven by a weak U.S. dollar, anticipated Federal Reserve rate cuts, and geopolitical tensions.
- Gold’s safe-haven status and strong inflows into gold-backed ETFs support ongoing demand.
- Central banks have increased gold reserves, with gold surpassing U.S. Treasuries in their holdings for the first time since 1996.
Gold prices have surged significantly in 2025, with the precious metal breaking above $4,000 per ounce for the first time, according to Morgan Stanley. The bank forecasts that this upward trend will continue through 2026 due to factors including a weak U.S. dollar and expectations of Federal Reserve interest rate cuts.
So far in 2025, gold has gained nearly 50%, making it one of the year’s top-performing assets. On October 10, gold reached a new high above $4,000 per ounce, though it saw a sharp 6% decline on October 21, the largest drop in 12 years. Despite this, Morgan Stanley expects the rally to persist, projecting a target price of $4,400 per ounce by the end of 2026, up from their previous estimate of $3,313.
The bank attributes the price rise to several key factors. These include geopolitical tensions such as trade tariffs and conflicts like the Israel-Hamas crisis, concerns over the Federal Reserve’s independence, and the partial U.S. government shutdown. Morgan Stanley Metals & Mining Commodity Strategist Amy Gower stated, “Gold prices, which are up nearly 50% in 2025, are likely to add more gains by the end of 2026. Gold surpassed the share of U.S. Treasuries in central bank reserves for the first time since 1996, while ETFs backed by gold keep posting record inflows.”
“We see further upside in gold, driven by a falling U.S. dollar, strong ETF buying, continued central bank purchases, and a backdrop of uncertainty supporting demand for this safe-haven asset,” Gower added. A weak U.S. dollar makes gold cheaper for holders of other currencies, increasing demand. Exchange Traded Funds (ETFs) that hold gold have experienced record inflows, signalling strong investor interest.
Central banks have also shifted their reserves, increasing holdings of gold relative to U.S. Treasury securities. This change highlights gold’s growing appeal amid economic and geopolitical uncertainty. Overall, the combination of these factors supports the expectation of continued gold price gains into 2026.
For further information, see the recent gold update shared by Morgan Stanley.
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