Morgan Stanley drops blunt reality check on gold price surge

Core Viewpoint - Gold has not followed the typical pattern of rising during geopolitical tensions, particularly since the onset of the Iran war, with analysts attributing this to a stronger U.S. dollar and liquidity concerns rather than a decline in safe-haven demand [1][8]. Price Movements - Following the start of the Iran war, spot gold initially surged to $5,260 per ounce but then experienced a sharp pullback, dropping nearly 3.6% to around $5,137 per ounce on March 3 [2]. - As of the latest data, gold was priced at approximately $5,165.63 per ounce, translating to about $166.08 per gram and $166,078.74 per kilogram [2]. Analyst Forecasts - Morgan Stanley has raised its long-term gold price forecast to $4,500, maintaining a bullish year-end 2026 target of $6,300 [3]. - Other major banks have set various targets for gold prices, with Morgan Stanley predicting $5,700 per ounce in a bull case scenario for the second half of 2026, while Goldman Sachs anticipates $5,400 by December 2026 [7]. Influencing Factors - Analysts from Morgan Stanley highlight that expectations around Federal Reserve rate cuts, currency market dynamics, geopolitical tensions, and liquidity issues are currently shaping gold's price trajectory [4]. - The bank suggests that if geopolitical tensions persist, gold prices are likely to rise in the future [5].