Morgan Stanley issued a report stating that gold prices have already surpassed the firm's forecast of $4,750 per ounce for the second half of the year. However, the bank believes that gold prices have not yet peaked, primarily supported by geopolitical risks, positive signals from central banks, and ETF buying. The bank specifically raised its target price under a bullish scenario to $5,700 per ounce for the second half of the year. Silver prices are showing strong momentum, with spot premiums in the Shanghai market highlighting supply tightness.
Morgan Stanley pointed out that Poland’s central bank is shifting to an absolute tonnage target for gold reserves rather than a percentage of total reserves, indicating reduced sensitivity to price fluctuations. Expectations of interest rate cuts by the Federal Reserve this year should continue to support precious metal ETF buying. The surge in spot silver prices in Shanghai indicates that the supply crunch may persist.
Morgan Stanley stated that a bullish scenario for gold is unfolding, driven by a weakening U.S. Dollar Index, robust physical demand, and heightened geopolitical risks. The bank believes the upward trend in gold prices is not over. It emphasized a bull-market scenario target of $5,700 per ounce for the second half of 2026, implying a 14% upside from current levels.
Silver is trading at a record high of $100 per ounce, with its precious metal attributes dominating its price movement. After years of supply shortages, strong ETF demand is absorbing limited inventories. Spot silver prices in Shanghai (with a higher proportion of physically delivered contracts) are trading at a significant premium relative to CME Group, reflecting ongoing tightness in physical supply. Although solar energy demand may have peaked, potentially leading to weaker silver prices in the second half of the year, other drivers currently remain dominant.
