Morgan Stanley: Gold's hedging role needs to be repositioned to maintain the first choice for metal assets

The Zhitong Finance App learned that the price of gold fell all the way from 5,600 US dollars per ounce at the beginning of this year to falling below 4,000 US dollars per ounce recently. Despite weak short-term trends, Morgan Stanley said it will maintain gold as the first choice for metal assets and set a target price of 5,000 US dollars per ounce for the second quarter of 2027.

In response to the current drop in gold prices, Bank of America wealth management senior investment strategist Rob Haworth pointed out that the US-Iran conflict must end before the price of gold can return to 5,000 US dollars per ounce. He analyzed that gold has always been a traditional safe-haven tool, but the US-Iran conflict has led to a major shift in global capital flows, and countries facing rising energy and food costs are shifting resources from diversifying their reserves to other uses.

He stressed that the long-term investment appeal of gold still exists, but in the short term, central banks prioritize economic stability and energy security rather than accumulating more gold, causing gold to continue to face negative pressure. Therefore, as long as the US-Iran conflict continues, the pressure on the gold market will continue.

Morgan Stanley also pointed out in its latest report that the role of gold in the investment portfolio needs to be repositioned. According to the report, since 2020, gold has been unable to effectively hedge against the risk of falling stock markets, and may even amplify portfolio losses during extreme stock market sell-offs. However, during the sharp sell-off of US debt, its buffer value became more and more prominent, becoming a core tool to combat fiscal risk and sovereign credit risk.