Société Générale pivots back to bullish gold outlook

After trimming positions earlier this year, analysts at the French investment bank now view the metal as an attractive asset. Recent market volatility has normalized, and speculative positioning has climbed back above its two-year average. Furthermore, the GLD put/call ratio has reached a six-month low, reflecting a renewal in investor confidence. While elevated interest rates and a strong U.S. dollar remain traditional headwinds, the bank suggests that the most aggressive of the Fed's policy adjustments are already reflected in current pricing.

Société Générale remains strategically bullish, identifying a post-2022 regime shift where gold consistently trades near record highs despite positive real yields. This performance suggests a departure from historical models, driven by structural shifts such as sustained central bank purchases, dedollarization efforts, and sovereign debt concerns. These factors provide a robust floor for prices, insulating the market from further interest rate pressure. The bank anticipates that inflation risks remain underpriced, particularly as factors like U.S. tariffs and heavy infrastructure investment create a more inflationary environment than many investors currently anticipate.

Central bank activity remains a cornerstone of this outlook. As short-term speculative demand fluctuates, official-sector buying—led by China and other emerging markets—serves as a durable anchor for the metal. The bank concludes that with volatility declining and central bank demand holding steady, the risk-reward profile for gold has shifted back in favor of investors seeking long-term stability.