Morgan Stanley's metal strategist Amy Gower stated in an interview on the program Squawk Box Europe with CNBC that three factors may continue to support gold prices: sustained physical demand, a possible decline in long-term bond yields, and a decrease in oil prices that could ease inflationary pressures.
She made the above judgment after the gold price recently fell below $4,200. Prior to that, rising crude oil prices and the market's renewed expectation that the Federal Reserve would further tighten policies pushed the gold price to its lowest level since early August.
Morgan Stanley believes there is strong demand around $4,000.
The physical buying bid is the first pillar of Morgan Stanley's bullish logic on gold.
In July, central banks around the world bought a net of 23 metric tons of gold, with China alone increasing its holdings by about 20 tons. In the first eight months of 2026, China's total gold imports exceeded 1,000 tons, suggesting that annual demand is set to achieve its strongest performance since at least 2017.
Gower indicates that it is precisely this need that explains why she regards $4,000 as a meaningful bottom, and not just another psychological barrier.
Morgan Stanley's broader research also continues to be bullish on gold. The firm has previously raised its forecast for the gold price in 2026 to $4,400, citing central bank gold purchases, ETF buying interest in gold, and macroeconomic uncertainties as factors supporting demand.
Bond yields remain the biggest issue facing gold.
The current strongest resistance still comes from the bond market.
The yield on 10-year U.S. Treasury bonds recently rose above 5.3%, making government bonds, which provide interest income, more competitive than gold, which does not generate any returns. This relationship has made the yield on U.S. Treasuries one of the biggest headwinds facing gold.
Therefore, the second bullish scenario proposed by Gower depends on the eventual decline in long-term yields.
The same reason makes oil prices important. A decline in crude oil prices could reduce inflation expectations, ease the pressure on the Federal Reserve to further tighten policies, and ultimately lead to a decrease in yields.
