Morgan Stanley still favors gold on a 12-month view, even after the metal slid toward a seven-week low this week. Amy Gower, its head of metals and mining strategy, named 3 factors that could support prices.

Spot gold held near $4,176 on Thursday after a sharp sell-off on Monday. The metal is now down about 3.8% in 2026.

Gold Prices in 2026. Source: TradingView

Central Banks and China Keep the Physical Bid Alive

Gower, head of metals and mining strategy at Morgan Stanley, started with physical demand. Central banks added a net 23 metric tons in July, according to World Gold Council (WGC) data. China added 20 tons that month, and Poland added 8 tons.

Beijing then bought about20.2 tons in August, its largest monthly addition since October 2023.

China’s total imports, which include private and institutional buyers, passed 1,000 metric tons in the first eight months of 2026. Gower told CNBC that the pace puts them on track for their highest level since 2017.

“China seems to have this very strong appetite for gold,” she said.

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Are gold prices heading to $5,000+? Global gold ETF holdings are up to ~100 million ounces, near their highest level in at least 9 months. Gold holdings have risen over +4 million ounces since their July low, more than recovering the decline recorded between April and July.… pic.twitter.com/VeQA4iOxl2 — The Kobeissi Letter (@KobeissiLetter) September 20, 2026

Why Gold’s Next Move Could Come From Bonds and Barrels

Higher bond yields remain the biggest obstacle for gold, which pays no interest, Gower acknowledged. Her second factor is that intervention in long-dated debt could ease that pressure.

“What if we get more intervention in that long-dated bond market and then you get yields coming back down?” she stated.

Her third factor links oil to the same rate story. US and Iranian officials are reportedly holding separate talks with mediators over the seven-month Middle East conflict.

A quick de-escalation could pull oil lower and cool inflation expectations, limiting upward pressure on rates and yields.

Softer price data has already given gold some relief. US PCE inflation cooled to 3.4% in August, and gold jumpedabout $20 within minutes ofWednesday’s release.

Gower expects volatility around upcoming Fed meetings and data releases, but she still sees a clear level of support.

“We see $4,000 as quite a strong floor,” the executive added.

Other banks have flagged risks below that level. In June, Deutsche Bank analyst Michael Hsueh warned that three to four Fed hikes coulddrag gold toward $3,800.

Two data releases will now test gold before the Fed meets on October 27 and 28. Friday brings the September jobs report, followed by the September CPI release on October 14.

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