Amid rising economic uncertainty and global trade tensions, investors are increasingly turning to gold as a safe haven. Recent reports from investment giants like Morgan Stanley, Goldman Sachs, and UBS have underscored gold's pivotal role in protecting capital and enhancing returns under these circumstances.
Analysts at Morgan Stanley point out that a weaker US dollar and rising US inflation rates could drive significant inflows of funds into precious metals, including gold. Any shifts in Chinese economic policies could also have an unexpectedly positive effect on the gold market.
However, Morgan Stanley cautions that US tariffs could pose a risk to growth, particularly as the effect of metal inventories fades. Despite this, the bank remains optimistic about investing in gold, silver, and copper.
Morgan Stanley expects current trends in the metal markets to continue this year, with the potential for gains in the prices of copper, gold, and silver. The bank has raised its fourth-quarter gold price target to $3,800 per ounce, supported by demand from central banks and investors, a weaker dollar, inflows into exchange-traded funds, and continued geopolitical and macroeconomic uncertainty.
Goldman Sachs also predicts that gold prices will reach $3,700 per ounce by the end of the year and $4,000 by mid-2026. The bank attributes this optimistic outlook to continued inflows from central banks and exchange-traded funds, as well as large off-balance sheet purchases.
Goldman Sachs notes that gold demand from central banks and non-US institutions in the London market reached 31 tons in May, a figure far exceeding the monthly average of 17 tons before 2022. Central banks have purchased 77 tons of gold so far this year, slightly less than the bank's initial forecast of 80 tons for the first half of 2026.
Although UBS considers the recent escalation of tariffs by the White House to be a negotiating tactic, the bank still recommends buying gold as a hedge against political risks. UBS expects that effective US tariff rates will stabilize at around 15%, less than half of the recently announced rates of 30% to 35%.
Overall, forecasts from Morgan Stanley, Goldman Sachs, and UBS suggest that gold will remain an attractive investment option in the foreseeable future, driven by trade tensions, monetary policies, and strong demand from central banks.
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