Morgan Stanley's Amy Gower says gold's recent slide does not undermine the metal's longer-term case, favoring it on a 12-month view and calling $4,000 an ounce a strong floor. She points to central bank and Chinese buying, government debt worries, and a possible oil-led easing in inflation expectations as the three supports behind that view.
Gower holds $4,000 floor after the slide
Gold slid toward a seven-week low earlier this week after a sharp fall on Monday, when rising bond yields raised concern about demand for assets that pay no interest. The metal has lost roughly 10% over the past six months. Futures were trading around $4,210 on Wednesday.
Still, Morgan Stanley's head of metals and mining strategy, Amy Gower, told CNBC's Squawk Box Europe that the pullback does not undermine the longer-term case for holding gold. She favors the metal on a 12-month view and sees $4,000 an ounce as a strong floor.
Central bank and Chinese demand lead the case
The first support Gower cited is official buying. Central banks purchased a net 23 metric tons in July, according to World Gold Council data, with China taking about 20 tons and Poland about 8. She said China's gold imports overall are on track to be the highest since 2017. The World Gold Council says the country's total imports, which also capture private and institutional demand, topped 1,000 metric tons in the first eight months of the year.
Debt worries and oil complete the picture
The second factor is government debt. Markets remain gripped by worries over long-term public debt and fiscal sustainability, and Gower acknowledged that higher bond yields and growing expectations of fresh Federal Reserve rate hikes remain a challenge for gold. She suggested, however, that further intervention in long-dated bond markets, or a shift in inflation expectations, could bring yields back down and work in gold's favor.
The third is oil. US and Iranian officials are reportedly holding separate talks with mediators aimed at resolving the seven-month Middle East conflict, and a rapid de-escalation could pull oil prices lower. Kpler data show Middle Eastern crude exports rebounded this month to their highest level since the war began. Any easing in inflation expectations, Gower argued, could ease pressure on interest rates and bond yields, which in turn would lift gold.
Heading into the final quarter of 2026, Gower acknowledged gold could stay volatile against an uncertain economic backdrop, with more Fed meetings and data releases still to come.
Source: Investinglive
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