As reported by the Smart Finance APP, Morgan Stanley Fund stated in a publication that after this round of adjustments, the upside of gold has opened up again. If Trump's relevant policies truly come into effect next year, there is a possibility of a second round of inflation or stagflation in the USA, both of which will support the continued increase in gold prices. His series of policy slogans, including global tariff increases, domestic tax cuts in the USA, deportation of immigrants, etc., could lead to difficulties in lowering inflation in the USA. Concerns about the weakening of the USD credit in the long term have not been eliminated. Therefore, the bullish outlook for the future upside of gold remains.

In September of this year, the Federal Reserve began this round of interest rate cuts, with cuts of 50/25bp in September and November respectively. At present, the market is pricing a probability of approximately 50-60% for a 25bp cut in December, a probability that will change as the deadline approaches. There is also a possibility of no cut in December, while the market is pricing in 2-3 cuts next year. Expectations for rate cuts have shown a certain amount of decline compared to earlier, with the pace possibly slowing down.

Morgan Stanley Fund states that during an interest rate cut cycle, gold is a type of asset that benefits with a certain level of certainty. It has a negative correlation with medium to long-term US bond rates, leading in pace compared to the start of the rate cut cycle, showing a bottom area after the peak of rate hikes. Gold performs particularly strongly in recessionary trades. In the medium to long term, concerns about the weakening of USD credit, along with continued gold purchases by central banks worldwide, collectively support the gold price rise and make declines difficult. For precious metals, industrial metals, crude oil, and other large commodities, prices are determined by both financial attributes and commodity attributes.

From a financial attribute perspective, commodity prices generally show a certain negative correlation with the USD index; a strong USD leads to significant adjustments in commodities. Not only has gold fallen, but LME copper has also fallen below $9,000/ton, while Brent crude oil has been volatile in the $70 region. The impact of the interest rate cut cycle on financial assets is significant, favoring assets sensitive to interest rates. If economic conditions do not improve or further slow down, or concerns about recession arise during the rate cut process, there are worries about the decline in industrial metals and other commodity prices due to concerns about the decline in end-demand.

From a commodity attribute perspective, the long-term price trend of commodities is ultimately determined by the supply and demand of commodities. Therefore, in the medium to long term, Morgan Stanley Fund focuses more on estimating the supply and demand of commodities, including future additions of ore and resource production capacity, current production status of existing mines, trends in cost centers, industry capital expenditure expectations, and the impact of energy like crude oil, further attention is needed on production policy changes by major oil-producing nations under OPEC+, changes in geopolitical conflicts, and so on. From the supply side, copper supply remains relatively tight, while concerns exist about the supply release in energy sources like crude oil. On the demand side, attention is paid to the global economic outlook, changes in economic trends, especially the significant impact of Chinese domestic economic data on the demand for industrial metals, and Morgan Stanley Fund will continue to closely monitor and pay close attention to the growth trends of downstream end-demand for commodities, such as the investment growth rate in downstream power grids, changes in sectors like household appliances, autos, real estate, future domestic policy expectations, changes in economic stimulus policies driving marginal improvements in demand for industrial metals.

In conclusion, Morgan Stanley Fund believes that at the current stage, it is important to focus on positioning opportunities for gold after overselling. Looking ahead to next year, there may still be potential opportunities for prices of industrial metals like copper.