Morgan Stanley Cuts Global Gold Price Forecast for 2026, Losing Its Shine?

The rally in gold prices, which once propelled the precious metal to record highs at the start of 2026, is now facing a test. Citing Mining.com on Monday (27/4/2026), investment bank Morgan Stanley has cut its global gold price forecast for the second half of 2026 to $5,200 per troy ounce, down from the previous $5,700 per troy ounce—a correction of nearly 10%. This revision in the 2026 global gold price marks a shift in tone from one of the major investment banks, which had previously been constructive on gold. The cut comes after a six-week selling spree that caused gold prices to plunge nearly 8% from their peak, described as the worst monthly decline since the 2008 financial crisis. Nevertheless, on an annual basis, gold prices have still recorded a rise of around 9%. Morgan Stanley attributes the pressure on gold prices to a combination of a “rare supply shock” and rising real yields due to delayed expectations for interest rate cuts by the US Federal Reserve (The Fed). The rise in real yields is at the centre of this gold price forecast revision. When real bond yields increase, non-yielding assets like gold lose their relative appeal. Morgan Stanley assesses that the classic inverse relationship between gold and real yields, which weakened during the 2025 rally, is now reasserting itself. Market expectations that previously believed The Fed would cut rates more quickly also supported the gold rally, but the delay in rate cuts has altered sentiment. Energy disruptions in the Middle East that have driven up oil prices are also said to have raised inflation expectations. However, rather than benefiting gold, inflation rises accompanied by economic resilience are instead pushing real yields higher. In Morgan Stanley’s view, this means gold is no longer driven solely by narratives of geopolitical uncertainty but more by interest rate and liquidity dynamics.