UNITED STATES September 24 2013 3:44 PM

NEW YORK (Scrap Register): When the Federal Reserve delayed tapering of its quantitative easing program, it boosted metals prices, but the gains may not last.

Morgan Stanley said that the United States currency weakness and lower interest rates for longer than anticipated, “will likely provide a temporary uplift for precious and base metals. For precious metals, we are concerned that the postponement is only delaying the inevitable, while base metals and other industrial commodities could see some lasting effects should the continued stimulus boost industrial demand and investment.”

The longer-term story for gold is that investors are losing interest in the metal as both a risk and inflation hedge, while physical demand is also being challenged as the U.S. dollar rises.

“We envision gold prices averaging in a $1,200-1,350/oz range in the coming year before trending lower in the following,” Morgan Stanley concluded.