Introduction to Gold Prices
As gold prices hover near record highs following a 64 percent surge in 2025, Morgan Stanley predicts the precious metal will climb to $4,800 per ounce by the fourth quarter of 2026. This prediction is driven by several factors including falling interest rates, potential Federal Reserve leadership changes, and persistent central bank demand.
Factors Driving Gold Price Increases
Falling global interest rates are a key factor in the predicted increase in gold prices. Lower interest rates reduce the opportunity cost of holding gold, a non-yielding asset, making it more attractive to investors. Additionally, a potential leadership change at the Federal Reserve could hasten policy easing and weaken the US dollar, conditions that are historically supportive of precious metals. Central bank and institutional fund buying will also sustain momentum, as demand from these sources persisted strongly through 2025, diversifying reserves away from traditional assets.
Consensus from Other Banks
Major institutions echo Morgan Stanley’s optimism. JPMorgan forecasts gold averaging $5,055 per ounce by Q4 2026, rising to $5,400 by end-2027, citing unexhausted trends in investor and central bank diversification. Goldman Sachs expects central bank purchases at 70 tonnes monthly, with upside potential beyond its $4,900 year-end target. State Street sees $4,000-$4,500, potentially $5,000 with geopolitical escalations and robust Asian physical demand.
Performance and Momentum in 2025
Gold delivered its strongest year since 1979, up 64 percent with spot prices hitting records on December 26. Geopolitical unrest, including Middle East conflicts, Ukraine war, and US tariffs under President Trump, stoked inflation fears and safe-haven buying. Central banks and Asian demand, especially from China and India, offset higher prices, while US manufacturing contraction and unemployment risks bolstered the case. Silver complemented the trend, surging 147 percent amid supply deficits and China’s new export controls.
Diverse Views on Gold Prices
Not all views are uniformly bullish. The World Gold Council warns of rangebound prices if economic growth accelerates under Trump policies, hiking rates and strengthening the dollar. A severe downturn or rising risks could lift gold 15-30 percent, while recycling trends and volatility favor its diversifier role.
Conclusion
In conclusion, gold prices are predicted to continue their upward trend, driven by a combination of factors including falling interest rates, potential Federal Reserve leadership changes, and persistent central bank demand. With major institutions echoing Morgan Stanley’s optimism, it is likely that gold will reach $4,800 per ounce by the fourth quarter of 2026. However, it is essential to consider diverse views and potential risks, such as rangebound prices if economic growth accelerates, to make informed investment decisions. As the global economic landscape continues to evolve, gold is likely to remain a popular safe-haven asset, driven by its unique characteristics and diverse demand from central banks, institutions, and individual investors.
