Morgan Stanley Gold Price Forecast: XAU ETF Exposure Still Too Low For 2026 - Exchange Rates UK

What the desk is arguing

Morgan Stanley's gold forecast highlights that current ETF exposure to gold is still too low compared to where it should be heading into 2026. The bank argues that structural demand from institutional investors will drive additional inflows. This view implicitly rejects the bearish case that gold has peaked.

Supporting evidence includes persistent central bank buying and a favorable macroeconomic backdrop for gold as a hedge. The desk notes that ETF holdings remain well below historical highs, leaving room for significant accumulation.

Where it sits in our coverage

Our coverage for EUR/USD does not directly cover gold, but the gold view has implications for FX via risk sentiment and commodity FX. The consensus target for EUR/USD is 1.10, with a firm spread from 1.04 to 1.12. This gold bullish view aligns with a broader risk-on narrative that could weaken the USD.

Specific firms in our coverage include: - JPMorgan: EUR/USD target 1.10, Mar26 - Morgan Stanley: EUR/USD target 1.075, Mar26 (consistent with gold bullishness as a USD-negative view) - Goldman Sachs: EUR/USD target 1.12, Mar26

How other firms see it

Other banks have mixed views on gold. Goldman Sachs is aligned, also bullish on gold due to central bank buying. Barclays is contrary, arguing that gold's rally is overdone and ETF flows will not materialize.

• Goldman Sachs: aligned
• Barclays: contrary