Morgan Stanley Keeps Gold as Its Top Pick with $5,000 Target in 2027
Morgan Stanley kept gold as its top pick among metals with a target of $5,000 per ounce in Q2 2027, as the metal holds above $4,000 due to central bank buying.
Morgan Stanley maintained gold as its top pick among metals with a target of $5,000 per ounce by the second quarter of 2027, in a report dated October 26.
The report noted that the relationship between real yields and gold from March to July pointed to a price below $3,000 per ounce, but central bank buying and record inflows into exchange-traded funds kept the metal above $4,000.
Gold ETFs recorded record inflows of $31 billion in the third quarter, supporting institutional demand, while central banks continued to bolster their reserves. The bank said these factors explain the metal's resilience despite rising real yields.
The report warned of risks that could pull gold lower, including further Fed tightening, a stronger dollar, and potential selling from the official sector. The question remains whether the $4,000 level will hold if yields continue to rise, or if a pullback will open up greater buying opportunities.
What do these terms mean?
Real Yield: The yield on a bond after deducting inflation, used to measure the actual return on investment in debt instruments.
Price Target: A level set by an analyst or investment bank that an asset is expected to reach within a specified period of time.
Official Sector: Central banks, governments, and sovereign wealth funds that hold gold as part of their reserves.
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