Morgan Stanley Strategist Outlines Three Reasons to Hold Gold Despite Recent Price Decline
Gold prices have retreated, but Morgan Stanley's metals and mining strategist Amy Gower sees three key factors supporting the precious metal. These include strong physical demand from central banks like China and Poland, concerns over global fiscal sustainability, and potential easing of inflationary pressures that could lower bond yields. Despite a recent 10% drop in gold prices over six months, Gower remains optimistic for the long term, citing $4,000 as a solid support level. Gower highlighted China's robust appetite for gold, with imports on track to be among the highest since 2017. Central banks added 23 metric tons of gold in July alone, driven by purchases from major economies. Additionally, potential policy interventions or shifts in inflation expectations could benefit gold prices if bond yields decline. The strategist also noted that a de-escalation in tensions between U.S. and Iranian officials might lower oil prices, which would ease inflationary pressures and support gold demand.
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