Banks bullish on gold price as Morgan Stanley sets $4,800 target

[Ben Graham]

After delivering its best annual performance since 1979, gold is drawing fresh bullish calls from major banks as conditions line up for fresh record highs.

In a note published on Monday, Morgan Stanley said prices could hit new heights this year and rise to $4,800 per ounce by the fourth quarter, citing falling interest rates, a potential leadership shift in the US Federal Reserve, and continued buying by central banks and funds.

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In 2025, the same factors already drove gold prices to multiple records, with its last peak set at $4,549.71 an ounce on Boxing Day. For the calendar year, gold was among the best-performing commodities with a gain of nearly 65%.

That strong momentum is likely to extend into this year, analysts said, noting the geopolitical factors in play that could further raise the metal’s safe-haven appeal. Specifically, the bank pointed to the events in Venezuela over the weekend as a potential trigger of gold buying.

The same sentiment is being echoed by those at Bank of America. Also on Monday, analysts led by Michael Widmer, its head of metals research, said gold will remain a key portfolio hedge in 2026, projecting its price to average $4,538 per ounce through the year.

“Gold continues to stand out as a hedge and alpha source,” Widmer said in a Monday report, citing tightening market conditions and strong earnings sensitivity. “Whichever portfolio you’re looking at, whether it’s a central bank portfolio or an institutional portfolio, they can benefit from diversification into gold,” he noted.

BofA’s outlook is based on projections of falling supply and rising costs in the gold sector. According to Widmer, the 13 major North American gold miners are expected to produce 19.2 million ounces this year, a decline of 2% from 2025.

Market forecasts for costs are also too optimistic, he added, projecting that the average all-in sustaining costs will rise 3% to about $1,600 per ounce, a level slightly above the market consensus.

Other metals

In addition to gold, banks are also bullish on several other metals. For silver, BofA’s Widmer gave an ambitious price target of between $135 and $309 per ounce. The white-colored metal ended 2025 with a gain of more than 140%, more than doubling that of gold. Currently, it is trading near a record of near $80 per ounce.

Widmer’s prediction for silver, as he noted, is derived from the metal’s historical relationship with gold. At the moment, the gold-to-silver ratio of around 59 suggests silver could still outperform gold, he said, noting that the ratio had reached as low as 32 in 2011 — when silver last had a major rally — and 14 in 1980. Its price target range would fall between these two historic lows in the gold-silver ratio, Widmer said.

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Morgan Stanley analysts also flagged “upside risk” for silver as it ends another year in deficit due to rising industrial demand and investor appetite. In its note, the bank said that China’s export licence requirements, which have taken effect from the start of this year, would further lift prices.

As for base metals, Morgan Stanley sees further rallies in aluminum and copper, as both are facing supply challenges and increasing demand.

“Aluminum supply is constrained everywhere except Indonesia, while the rising Midwest Premium suggests some US buying may be returning,” the note said. Meanwhile, copper imports have risen, keeping other markets tight and that 2025’s high level of copper supply disruptions were continuing into 2026, it added.