Morgan Stanley's Gower: Fed Holding Rates Through '26

Morgan Stanley Lead Metals & Mining Strategist Amy Gower stated that the firm's outlook anticipates the Federal Reserve maintaining current interest rates through 2026. This projection diverges from market consensus, which anticipates around 1.6 rate increases by the end of the current year. Gower highlighted the Federal Reserve's monetary policy as a critical determinant for gold's price performance. She noted the substantial influence of exchange traded funds (ETFs) on gold demand, observing that these funds closely monitor and react to the Fed's policy shifts. A sustained period of stable interest rates is expected to be supportive of gold prices. Conversely, any further increases in rates could lead to increased selling pressure from gold ETFs, potentially exerting downward pressure on the commodity's value.