Morgan Stanley: ETF Demand is the Key Variable Driving Gold to $5,200

Odaily reports that Morgan Stanley stated that without a significant recovery in ETF inflows, its bullish target of gold reaching $5,200 in the second half of the year will become much harder to achieve. Morgan Stanley analysts said: "Although central bank gold purchases may continue, ETF flows are more sensitive to changes in interest rate expectations. The missing link is ETF demand, which may remain sensitive to the Federal Reserve's policy path, real yields, and the US dollar."

Morgan Stanley remains bullish on the long-term outlook for gold, as easing tensions in the Middle East and falling oil prices help alleviate concerns about inflation. However, the Fed's hawkish tone at its most recent meeting reinforced expectations that interest rates will remain higher for longer, increasing the opportunity cost of holding non-yielding assets like gold. (Jin Shi)