Morgan Stanley Expects Gold to Exceed $5,000 Per Ounce in 2027

Amy Gower of Morgan Stanley told CNBC that bond yields near 20-year highs, a strong dollar, and elevated oil prices have created a challenging environment for gold. She explained that the recent sell-off is mostly driven by automated index funds flipping positions, rather than a shift in fundamental demand for the metal.

Gower pointed to strong physical demand from central banks, including China's extensive gold imports running at their highest level since at least 2017, alongside continued inflows into metal-linked exchange-traded funds.

Despite current pressure, Gower said she still expects gold to breach the $5,000 per ounce mark in the second half of 2027. She described the $4,000 level as a 'pretty firm floor,' meaning a level likely to hold against downside.

Gold forecasts matter to a broad segment of households and investors in the region, as the metal serves as a safe haven during periods of market volatility and rising inflation. Traders are monitoring institutional demand from central banks and investment funds, as it is the key factor determining whether the metal will maintain its strength following the current wave of selling.

What do these terms mean?

Ounce: A global unit of measurement for gold weight, equivalent to approximately 31.1 grams. Exchange-Traded Funds (ETFs): Funds whose shares are traded on stock exchanges and track the price of a specific asset such as gold. Central Banks: Official banks that issue currency and manage reserves in each country. Safe Haven: An asset sought by investors to preserve the value of their funds during market turmoil.