Gold Prices Cut: Morgan Stanley Slashes 2026 Forecast

Morgan Stanley has revised its outlook for gold, cutting its second-half 2026 price target to $5,200 per ounce from a previously bullish $5,700. This adjustment follows a sharp six-week decline in gold prices, which have dropped about 8% since late February, falling into the low $4,800s. Factors contributing to this downturn include rising oil prices fueling inflation fears, increasing real yields, and diminishing hopes for imminent Federal Reserve interest rate cuts.

The bank highlighted that official demand has weakened, with Turkey's central bank selling significant gold reserves in March and other central banks slowing their buying pace. Additionally, Gold ETFs experienced substantial outflows in March after significant inflows in January and February. Technical indicators also showed weakness as gold prices broke below key moving averages, triggering further selling.

Despite these headwinds, gold has found support around its 200-day moving average. Morgan Stanley anticipates that the next upward movement for gold prices will likely be driven by actual Federal Reserve interest rate reductions and stabilization in bond markets. Key upcoming economic indicators, including the April jobs and CPI reports, alongside the Federal Reserve's meeting minutes, will be crucial in determining gold's trajectory.