Morgan Stanley’s “Major Theme” is stick with metals — gold, silver, copper, and aluminium

Precious and base metals were among the standout performers of 2025. Gold and silver surged as investors sought hard assets amid geopolitical uncertainty and falling yields, while copper and aluminium rode a powerful combination of supply constraints and structurally rising demand tied to electrification and energy transition themes.

The obvious question now confronting investors is the million-dollar one: can the metals rally continue into 2026? 🤔

Morgan Stanley thinks it can. In its latest China and the Miners research note, the investment bank has doubled down on its positive view toward precious and base metals — a view it correctly held through 2025 — naming metals its “Major Theme” for the year ahead [1]. While short-term volatility is inevitable after such strong gains, the bank argues the fundamental backdrop remains substantially supportive.

Precious metals outlook

Morgan Stanley’s outlook for precious metals remains firmly skewed to the upside, particularly for gold and silver. Report authors Rahul Anand and Michael Stancliff highlight a rare alignment of macro forces supporting gold: anticipated rate cuts, persistent geopolitical risk, strong central-bank buying, and continued investor demand for real assets. These factors are combining to “skew precious metals price risks higher,” while falling interest rates and robust physical demand continue to provide structural support, the analysts note [1].

Morgan Stanley forecasts gold reaching US$4,800 per ounce by the fourth quarter of 2026, noting that central-bank and ETF demand remain key pillars of the bull case [1]. Importantly, the investment bank sees gold’s role evolving beyond a simple hedge against interest rates. The analysts argue that gold is increasingly behaving as a fiscal-risk hedge, benefiting from concerns around government debt and structural deficits in developed markets [2].

Silver, meanwhile, remains a high-conviction call despite its extraordinary run. Morgan Stanley notes that silver’s supply-demand balance remains tight, with inventories low and lease rates rising. China’s new export-licensing requirements are flagged as a further upside risk, reinforcing the bank’s view that silver “continues to break new highs amid low inventories” [1].

Base metals outlook

Morgan Stanley is equally constructive on select base metals, with aluminium and copper standing out as preferred exposures.

Aluminium remains favoured due to persistent supply constraints outside Indonesia and China’s capacity caps. The bank points to tight ex-China supply and rising regional premiums as evidence that physical markets remain undersupplied. Morgan Stanley expects aluminium prices to reach US$3,250 per tonne by the second quarter of 2026, supported by constrained production and steady demand [1].

Copper’s outlook is underpinned by a compelling mix of cyclical tightness and secular demand growth. While China’s property sector remains weak, Morgan Stanley argues that copper demand is increasingly driven by electrification, renewable energy, and digital infrastructure rather than traditional construction. “2025’s supply disruptions are spilling into 2026,” the bank notes, keeping ex-China markets tight even as global growth moderates [1].