Morgan Stanley cuts gold price outlook by almost 10%

Analysts at Morgan Stanley have slashed their gold price forecast by almost 10% in the midst of what they view as a significant shift in the macroeconomic landscape.

According to a report by the Economic Times based in New Delhi, the bank’s commodities team has set a gold price target for this year’s second half at $5,200 per ounce, down from $5,700 previously.

The revision follows a six-week selloff that saw gold plunge by nearly a quarter from its record highs, in the process recording its worst monthly performance since 2008.

While prices have somewhat steadied in recent sessions, Morgan Stanley analysts said the recent weakness has “changed the tone” of gold, for it is no longer just a random occurrence but rather a fundamental shift.

According to their analysis, the drop-off in gold stems from the combination of a “rare supply shock” and rising real interest rates from delayed Federal Reserve rate cuts. This, as they noted, “changed the entire macro landscape” and had gold investors rethink their positions.

Moving forward, the bank expects gold to serve as more of a macroeconomic barometer — a commodity that reflects liquidity conditions, bond yields and monetary policy — rather than just a hedge against uncertainty as it traditionally did.

The outlook will be more data driven and less sentiment driven, it said.

In the first part of 2026, gold has already experienced significant ups and downs. In late January, it soared to an all-time high of nearly $5,600 an oz., just to crash over 10% in one session amid a seismic drawdown. The metal then spiked at the beginning of the U.S.-Iran war, but also came down sharply as inflationary pressure took hold.

Still, bullion remains up 9% on the year, with many banks including Goldman seeing further upside in prices.

This month, gold has traded within a tight range between $4,650 and $4,850 amid talks to end the Middle East conflict.