Morgan Stanley: Real Yields Surge, Gold Still Holds $4000, Central Bank and ETF Buying Provide Support

Shenchao TechFlow reported,according to Chaoxiang Research, Morgan Stanley noted in its October 26, 2026 research report that gold has fallen only 10% from its August high and remains slightly above $4000/oz; based on the real yield relationship from March to July 2026, gold should be below $3000/oz, 28% lower; 2Q26 central bank purchases annualized at 1155 tonnes.

Morgan Stanley assessed that the surge in real yields did not overwhelm gold; the gap stemmed from structural demand such as central bank purchases and ETF inflows, with 3Q global gold ETF inflows reaching a record $31 billion. Gold's hedge against equities has been ineffective since 2020, but it still provided a buffer during the worst bond sell-off weeks. Morgan Stanley maintained gold as its top metals pick, with a target price of $5000/oz for Q2 2027. Risks include further Fed tightening, a stronger dollar, and central bank gold sales.

Source: Shenchao TechFlow