By Tom Ozimek

Gold prices are poised to climb to fresh record highs by the end of the year, with Morgan Stanley forecasting the bullion at $4,800 per ounce by the fourth quarter of 2026, as falling interest rates, central bank buying, and persistent geopolitical risk continue to drive demand for the traditional safe-haven asset.

In a research note on Jan. 5, the bank said the precious metal’s rally is being underpinned by a combination of macroeconomic and policy shifts, including an expected easing cycle by the U.S. Federal Reserve, a change in leadership at the Federal Reserve, and sustained purchases by central banks and investment funds.

Bullion has already delivered a historic run. Spot gold touched an all-time high of $4,549.71 per ounce on Dec. 26, 2025, and finished the year up 64 percent, marking its strongest annual performance since 1979.

Safe-Haven Demand Reignited

Gold prices jumped again this week after the capture of Venezuelan leader Nicolás Maduro by U.S. military forces heightened geopolitical uncertainty across energy and financial markets. Analysts say such flashpoints have revived safe-haven buying at a time when many investors were already positioned defensively.

“The situation around Venezuela has clearly reactivated safe-haven demand, but it comes on top of existing concerns about geopolitics, energy supply, and monetary policy,” said Alexander Zumpfe, a precious metals trader at Heraeus Metals Germany.

Investors typically seek gold during periods of economic and political stress, as the yellow metal tends to perform well in low-interest-rate environments, when the opportunity cost of holding a non-yielding asset declines.

Morgan Stanley said in its note that recent events in Venezuela were likely to reinforce gold’s appeal as a store of value, though it did not cite the developments as a formal input into its $4,800 forecast.

JPMorgan Chase also recently raised its gold price outlook, forecasting the metal at $5,000 an ounce by the fourth quarter of 2026 and $6,000 in the longer term.

“While this rally in gold has not, and will not, be linear, we believe the trends driving this rebasing higher in gold prices are not exhausted,” Natasha Kaneva, head of Global Commodities Strategy at JPMorgan, said in a Dec. 18 note, citing continued diversification into gold by central banks and investors, as trade uncertainty and ongoing geopolitical risk fuel safe-haven demand.

Analysts at ING also see more upside for gold. In a Jan. 6 note, the bank said gold purchases by central banks and expectations for further Fed rate cuts are underpinning the precious metal.

Fed Policy, Dollar Outlook Key Drivers

Morgan Stanley’s latest projection represents a sharp upgrade from its prior outlook. In October 2025, the bank lifted its 2026 gold forecast to $4,400 per ounce, citing expectations of U.S. rate cuts, a weaker dollar, and strong institutional inflows.

“Investors are watching gold not just as a hedge against inflation, but as a barometer for everything from central bank policy to geopolitical risk,” Amy Gower, Morgan Stanley’s metals and mining commodity strategist, said in the October note.

“We see further upside in gold, driven by a falling U.S. dollar, strong ETF buying, continued central bank purchases, and a backdrop of uncertainty supporting demand for this safe-haven asset.”

Gold also recently overtook U.S. Treasuries as a share of global central bank reserves for the first time since 1996, with Morgan Stanley characterizing this development as a “powerful signal” that investors are confident in the yellow metal’s long-term value.

Exchange-traded funds backed by physical gold have posted record inflows, signaling interest from both institutional and retail investors.

“Even non-professional buyers, or retail investors, are joining the rush for gold,” Morgan Stanley analysts wrote in the October note, adding that the demand for gold is further underpinned by expectations for a weaker dollar and a broader shift away from dollar-denominated assets.

The U.S. dollar ended 2025 down around 9 percent, marking its worst performance since 2017.

Silver, Copper Also in Focus

While gold remains Morgan Stanley’s top commodity pick, the bank also highlighted strength across other metals markets.

For silver, analysts said 2025 marked the peak of a structural supply deficit, with China’s new export licence requirements adding to upside risks. Silver surged 147 percent last year, its strongest annual gain on record, driven by a combination of industrial demand, investment inflows, and tight supply.

“Investor appetite remains strong, as silver-backed ETFs continue to attract inflows,” ING analysts said in a recent note, describing the 2026 outlook as “constructive,” underpinned by firm industrial demand from solar panels and battery technologies alongside sustained investment flows.

In base metals, Morgan Stanley said it favors aluminum and copper, both of which face ongoing supply constraints amid rising demand. Aluminum supply remains tight outside Indonesia, while signs of renewed U.S. buying have pushed prices higher.

Copper prices have also surged on the London Metal Exchange, with three-month copper hitting a record $13,387.50 per tonne this week. Morgan Stanley said U.S. import demand and persistent mine disruptions are keeping global markets tight heading into 2026.

Nickel was another standout, gaining 5.8 percent to $17,980 a tonne, its highest level since October 2024. Morgan Stanley said supply disruption risks in Indonesia are supporting prices, though it cautioned that much of the risk may already be priced in.

Reuters contributed to this report.