According to Société Générale, gold remains one of the most important components in the investment universe: The French major bank assumes that gold will continue to outperform the US dollar and US bonds until the end of 2026 – and therefore maintains a maximum gold quota in its multi-asset portfolio. At the same time, the bank expects the gold price to reach the mark of 5,000 US dollars per ounce as early as the end of next year.
For Société Générale, this clearly makes gold one of the winners in an environment in which classic fixed-income investments and the US currency are under pressure and investors are looking for alternative stabilizers for their portfolios.
Gold at the center of the strategy
In its current outlook, Société Générale makes it clear that gold plays an important role in strategic asset allocation. The bank is maintaining a gold quota of 10% in the multi-asset portfolio – and thus the upper limit that it has set itself. At the same time, the positioning in other asset classes is being noticeably reduced: US inflation-linked bonds are being completely removed from the portfolio, and corporate bonds are being halved from 10% to 5%.
This shift is justified by the market development to date: 2025 was a difficult year for many bond markets, while the weaker US dollar weighed on foreign currency returns for international investors. Gold, on the other hand – alongside selected equity markets – contributed positively to performance and benefited from a “broadening of asset performance,” according to the analysts.
For the coming quarters, Société Générale expects this trend to continue. Declining interest rates in the USA and a persistently weaker dollar are considered central framework conditions from which gold should benefit. Against this background, the precious metal remains a core component of strategic allocation from the bank’s perspective.
Gold: Interest rate turnaround and US economy as price drivers
Société Générale’s gold outlook is closely linked to expectations for US monetary policy. Although the Federal Reserve’s key interest rate has now been lowered from 5.5% to 4.0%, the analysts point out that the real key interest rate – i.e. after deducting inflation – is still increased. The monetary conditions are therefore still considered comparatively restrictive.
The bank’s economists expect further interest rate cuts totaling 50 basis points by April of next year. From their perspective, this would move monetary policy back towards a “neutral” level and gradually ease financing conditions. This would be fundamentally positive for gold, as falling interest rates and lower real returns improve the attractiveness of the non-interest-bearing precious metal compared to bonds.
At the same time, Société Générale points to structural risks in the US economy. Although inflationary pressure is likely to ease, there are signs of pressure on the labor market. The Fed is therefore faced with the challenge of combining its dual mandate – price stability and full employment – with growing political constraints.
Especially against the background of upcoming elections, the pressure could increase to keep food and living costs in check and to prevent higher interest rates from additionally slowing down growth. From the bank’s perspective, this speaks in favor of an overall cautious interest rate policy until 2026 with an increased probability of further easing steps if the economy cools down noticeably. This combination of moderate growth, falling real interest rates and persistent uncertainties forms the macroeconomic framework for the gold forecast.
Gold demand: Private investors and central banks as pillars
In addition to the interest rate landscape, Société Générale sees demand development as a central factor for the gold market. The analysts observe that private investors are increasingly diversifying their portfolios and adding gold in a growing proportion – be it via bars, coins or gold ETFs. Gold has thus increasingly established itself as a regular component in the asset structure, not just as a short-term “crisis insurer”.
From the bank’s perspective, the role of gold also remains important at the institutional level. In particular, non-Western central banks are continuing the trend of gradually diversifying their currency reserves away from the US dollar towards gold and other investments. These purchases counteract the supply on the surface and additionally support the market.
Against this background, Société Générale confirms its expectation that gold could rise to around 5,000 US dollars per ounce by the end of next year. In their report, the analysts point out that, from their perspective, setbacks continue to be used to build up or expand commitments in the precious metal. From a market perspective, both central bank demand and the continued inflows into physically backed products played an important role.
Gold as a diversification instrument
Another point in the analysts’ gold outlook is the question of diversification. In recent years, the correlation between US stocks and bonds has risen significantly – a pattern that weighs on classic mixed portfolios. In a phase in which both equity and bond markets came under pressure at times, the stabilizing effect of government bonds was significantly lower than in earlier cycles.
In this context, gold is seen as an instrument that can play an independent role in the portfolio. Historically, the precious metal has only limited correlation with the major stock indices and often behaves in the opposite direction to real interest rates and the US dollar. From the bank’s perspective, this speaks in favor of considering gold not only as a pure “safe haven” in times of crisis, but also as a strategic component to smooth the risk-return profile of a portfolio.
