The market turbulence in commodities triggered by the Iran conflict is shaking gold's status as a traditional safe-haven asset. Analysts at Morgan Stanley point out that gold's recent performance is more akin to a risk asset than a safe-haven tool, and they are shifting their focus to silver and aluminum, believing both possess more solid fundamental support.
Amy Gower, a strategist for metals and mining at Morgan Stanley, stated in an interview with CNBC this week that **&#34;Gold is now behaving more like a risk asset than a safe-haven asset. Normally, it should play a diversification role in a portfolio, but currently, this function is not truly being fulfilled.&#34;
Gold prices fell in tandem with most global asset classes during the initial stages of the Iran conflict. Despite a rebound driven by ceasefire news, as of Thursday, gold prices had cumulatively fallen by approximately 7% over the past month, closing at $4752.55 per ounce.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/11bd7aea-34c3-4eac-9d06-d7003cd444fb.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/11bd7aea-34c3-4eac-9d06-d7003cd444fb.png"/>
This performance is prompting a re-evaluation of gold's role in asset allocation and encouraging some investors to turn their attention to silver and aluminum. Morgan Stanley believes that both metals are substantially supported by supply-demand fundamentals, offering a clearer upward trajectory in the current market environment.
<h2>Gold's Safe-Haven Property Questioned, Large Holders Become Price Variables</h2>
Amy Gower acknowledged that some weakening in gold prices after market shocks is normal, as investors often first liquidate more liquid assets to raise cash.
However, she pointed out that current gold prices are increasingly influenced by the trading behavior of central banks, ETFs, and other large holders, making price movements harder to explain solely through a safe-haven logic.
This assessment implies that gold's diversification function in portfolios is facing structural challenges. When the market most needs safe-haven assets to act as a buffer, gold prices move in sync with risk assets, a signal that investors relying on gold for risk hedging should note.
<h2>Silver's Fundamentals are Solid, but Speculative Premium Has Partially Faded</h2>
In contrast, Amy Gower holds a more positive view on silver, believing it &#34;has real reasons to rise.&#34; Over the past 12 months, silver prices have risen by nearly 150%, driven by a sustained supply deficit over many years and a surge in demand from the solar industry.
&#34;The supply deficit has been in place for years, and in the precious metals market, such deficits can be masked for a period. When financial trading demand poured in last year, the available silver supply was simply insufficient,&#34; Amy Gower said.
Nonetheless, silver has also experienced a significant correction recently, falling over 11% in the past month. Spot prices are currently around $74 per ounce, far below the highs when it broke $100 in January. Amy Gower believes that the move above $100 was difficult to explain purely by fundamentals, and included significant speculative components.
Concurrently, demand-side changes are also emerging. Amy Gower noted that some large silver jewelry manufacturers are considering alternatives like gold-plated jewelry, indicating that high prices and price volatility are leading to some degree of demand substitution.
<h2>Aluminum Supply Shaken, Most Clear Fundamental Support</h2>
Among the metals favored by Morgan Stanley, aluminum presents the clearest rationale. Since the Iran conflict began, concerns about supply disruptions in the Gulf region have driven aluminum prices up by approximately 10.4%, currently trading at $3452.8 per ton.
Amy Gower stated that the aluminum market was already tight before the conflict. China had previously indicated no expansion of its aluminum capacity, while the rapid expansion of AI and data centers has led to a significant increase in electricity demand, reducing the competitiveness of aluminum smelters in the power market and creating existing supply-demand tightness.
&#34;Everything that has happened in the past month has only further reinforced this logic,&#34; she said. &#34;Global aluminum supply has currently lost about 4%. And a characteristic of aluminum is that once production stops, restarting is not easy.&#34;
Amy Gower further pointed out that even if the conflict ends tomorrow or if there is an unexpected demand shock, aluminum prices are likely to remain strongly supported because supply recovery will take time, and the existing deficit will be difficult to bridge in the short term.

GOLD

The Iran conflict is reshaping commodity logic – gold prices fell 7.8% last month, with Morgan Stanley directly stating that gold has become a "risk asset," its safe-haven halo fading. Meanwhile, the firm is betting on silver and aluminum: silver benefits from a multi-year supply deficit coupled with exploding demand from photovoltaics, while aluminum's fundamentals are the most robust due to a 4% global supply reduction that is difficult to restart

- The Iran conflict has caused significant turbulence in the commodities market, challenging gold's status as a traditional safe-haven asset.  
- Morgan Stanley analysts suggest that gold currently behaves more like a risk asset, with prices falling nearly 7% after the conflict began, while interest shifts towards silver and aluminum, which show stronger fundamental support.  
- Concerns arise as gold's safe-haven properties are questioned, impacted by trading behaviors of large holders, while aluminum prices are bolstered by supply disruptions and persistent demand constraints.

Wallstreetcn

Newmont

Gold.com

Agnico Eagle Mines

Kinross Gold

Zijin Mining

Morgan Stanley

SD-GOLD

ZHONGJIN GOLD

ChinaAMC Gold ETF

Sprott JR Gold Miners ETF

EFUND GOLD MI-U

ChinaAMC CSI SH-SZ-HK Gold Industry Equity ETF

Invesco Db Precious Metals ETF

Abrdn Silver ETF Trust

GLOBAL X Gold Explorers

EFUND GOLD MI ETF

Sprott GLD Miners Etf

Roundhill Gold Miners Weeklypay ETF

EFUND GOLD MI-R

Direxion Daily Jr Gold Miners Bull 2X

iShares Silver Tr

Direxion Daily Gold Miners Bull 2X

YieldMax Gold Miners Opt Inc Strgy ETF

VanEck Gold Miners ETF

ISHRS MSCI Glb Slct Met & Mining

SPDR Gold Shares

Pro Ultr Silver

Global X Silver Miner

SPDR Gold Minishares

Abrdn Gold ETF Trust

iShares MSCI Global Gold Miners

Sprott Active Gold & Silver Miners ETF

Pro Ultr GLD

iShares Gold Trust

SPDR S&P Mtls & Mng

VanEck Junior Gold Miners ETF

Us Gbl GLD & Met

iShares MSCI Global Silver Miners

Morgan Stanley: Investors Begin to Question Gold's Safe-Haven Status, Favoring Silver and Aluminum