Gold prices have declined significantly due to the recent rise in US bond yields, but Morgan Stanley has not changed its bullish view over the next 12 months. The bank's strategist believes that $4,000 is a “pretty strong bottom.” Gold has recently declined sharply, but it has yet to shake its long-term allocation logic. This is an opinion from Morgan Stanley. Amy Gower, head of the bank's metals and mining strategy, said that three factors may support the price of gold in the coming months. Gower pointed out that physical demand for gold is still strong, and in particular, the central bank remains active in purchasing gold. Gower said that global market concerns about long-term public debt and fiscal sustainability continue to heat up, but rising bond yields are still the main challenge facing gold. Gold itself does not generate interest, and its relative appeal is easily suppressed when bond yields rise. The trend of oil prices is also an important variable affecting gold. With US and Iranian officials reportedly making separate contacts through mediators, the conflict in the Middle East, which has continued for several months, is likely to ease.

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