Morgan Stanley questions gold’s safe-haven role, backs another metal

Fri Apr 10 2026

Gold’s traditional role as a portfolio shelter is coming under closer scrutiny, according to Morgan Stanley, which argues the metal’s recent price action has been more mixed than investors typically expect from a classic haven. The bank’s view comes after a volatile stretch across commodities over the past six weeks, driven by anxiety over conflict involving Iran, shifts in interest rate expectations and broader market turbulence. Although a ceasefire was agreed on Wednesday, that has not fully restored confidence in gold’s defensive behaviour.

The metal has pulled back sharply in recent weeks after rallying to record highs earlier in 2026, with prices coming under pressure as the US dollar strengthened and investors adjusted to a more uncertain rate outlook. For Morgan Stanley, that reversal matters because it highlights how gold has not consistently responded to geopolitical stress in the way investors might typically expect.

Instead of attracting uninterrupted haven flows, gold has at times weakened as liquidity pressures, positioning and macro factors — particularly real rates and the dollar — have taken precedence.

In that sense, Morgan Stanley’s argument is less about gold losing relevance altogether and more about the market changing the way it prices and expresses safety.

Why gold’s role is being questioned

The bank’s core point is that gold’s near-term performance appears increasingly influenced by macro forces and large institutional flows rather than a simple flight-to-safety dynamic. Analysts say price action is being shaped by central bank demand, exchange-traded fund positioning and shifts in currency and rate expectations, rather than by a broad, instinctive rush into defensive assets.

That shift matters because it can make gold behave less like a straightforward hedge and more like an asset sensitive to liquidity conditions and portfolio rotation. Morgan Stanley’s more cautious stance reflects this changing dynamic: gold may still offer long-term diversification benefits, but its short-term behaviour is proving less predictable as a geopolitical hedge.

In practical terms, the bank is arguing that investors should be more selective.Gold can still serve as a store of value over time, but recent moves suggest it is no longer the clearest or most immediate expression of a defensive metals trade.

Why silver looks more compelling

Morgan Stanley is more constructive on silver, which it sees as having a stronger fundamental underpinning despite recent volatility. Silver has retreated from its early-2026 highs, but the bank and industry data point to continued support from underlying supply-demand dynamics.

One of the main reasons is the persistence of supply deficits over several years, which has tightened the physical market even when prices have been volatile.

At the same time, industrial demand remains a key pillar, particularly from sectors such as solar and electronics, even as efficiency gains and substitution trends begin to moderate usage growth.

That does not mean silver is free from speculative swings.

Earlier surges were amplified by investor positioning, and volatility remains a feature of the market.

Even so, silver still appears to have a more tangible bullish case than gold because its outlook is supported not only by sentiment, but also by structural demand and constrained supply.

Why aluminium stands out

Aluminium is another metal where Morgan Stanley sees a clearer bullish case. The bank’s constructive view rests largely on supply-side constraints and the high energy intensity of production, which limits how quickly output can respond to demand.

London Metal Exchange aluminium prices have remained supported in recent months, with analysts pointing to tight supply conditions even as broader macro uncertainty persists. China’s capacity controls and the pressure of elevated power costs on smelters are central to that story.

Production disruptions in some regions and the difficulty of restarting idled capacity have reinforced the supply tightness.

Because aluminium production is closely tied to electricity availability and pricing, supply responses tend to be gradual rather than immediate.

As a result, prices may remain relatively resilient even if broader economic conditions soften.

Why Morgan Stanley is more balanced on copper

By contrast, Morgan Stanley takes a more balanced view on copper.

While the metal retains strong long-term support from electrification and energy transition trends, the bank sees a more mixed near-term backdrop shaped by demand uncertainty and evolving market dynamics.

That makes copper different from the more clearly supply-constrained aluminium story or the structurally tight silver market.

It remains a strategic metal with long-term appeal, but near-term price direction may be less straightforward.

The broader takeaway is that investors can no longer treat the metals complex as moving for the same reasons.

Gold’s short-term behaviour is becoming more macro-driven, silver is supported by tighter fundamentals, aluminium is benefiting from supply and power constraints, and copper sits between strong long-term demand and a more uncertain near-term outlook.

For portfolio managers, that means the next phase of metals investing may be less about owning a generic hedge and more about identifying where the real structural pressure points lie.

Source: https://invezz.com/