Societe Generale makes a bold prediction: it will break through the $5,000 mark in 2026, far surpassing the US dollar and bonds!
2025-12-16 11:31:05
Amidst heightened volatility in global financial markets, gold's allure as a traditional safe-haven asset is once again shining. Analysts at Societe Generale have explicitly stated that gold prices will continue to outperform throughout 2026, not only surpassing the performance of US bonds but also significantly outperforming the US dollar. This is the core reason why the bank maintains its highest allocation level and strongly recommends that investors actively buy this precious metal during price pullbacks to capitalize on long-term upward potential.
Golden Allocation in Multi-Asset Portfolios: Steady Adjustments to Meet Market Challenges
As the new year approaches, market analysts at Societe Generale announced in their latest report that they will maintain their 10% gold allocation in their multi-asset portfolio. This decision reflects the bank's strong confidence in gold. At the same time, they significantly adjusted their exposure to other fixed-income assets: reducing their holdings of US inflation-linked bonds to zero and halving their corporate bond holdings to just 5%. This strategic adjustment aims to optimize the portfolio structure and achieve a more balanced risk diversification and return potential in an environment of weak overall fixed-income asset performance and a weakening dollar dragging down returns on dollar-denominated assets.
Asset price performance expands to include a wider range of assets: Gold leads the rise of multiple asset classes.
The analysts emphasized in their report that fixed-income assets faced significant challenges over the past year, with a weaker dollar further eroding the common currency returns of these assets. However, Societe Generale's multi-asset management platform achieved outstanding performance through balanced allocation. This success stemmed from their accurate grasp of the theme of broadened asset price performance, reflected not only in the strong rebound of various stock markets but also, and more notably, in the superior performance of alternative assets such as gold. Looking ahead, as US interest rates gradually decline, this broadened theme is expected to continue, providing strong support for physical assets such as gold.
Reiterating my bold price forecast: Gold will reach $5,000 by the end of 2026.
Societe Generale analysts have reiterated their aggressive gold price forecast, predicting that gold will reach $5,000 per ounce by the end of 2026. This target is particularly compelling in the current market environment, especially considering that the current spot gold price is near its all-time high of around $4,300. This prediction is not unfounded but based on a comprehensive assessment of global central bank diversification needs, rising investor risk aversion, and expectations of further monetary easing.
Retail investors are enthusiastic: buying on dips is the best strategy.
Retail investors are continuing to diversify their asset allocations, with a significant influx of gold into the market through gold bars, coins, and gold exchange-traded funds (ETFs). Analysts specifically point out that non-allied central banks will continue to accelerate their diversification away from dollar-denominated assets, and gold itself offers effective protection against various risks, including the possibility of the Federal Reserve adopting a more dovish stance following high-level personnel changes. Therefore, they strongly recommend that investors buy decisively when prices pull back to lock in long-term appreciation potential.
Expectations of a dovish Fed policy: Supporting the bullish outlook for gold
Societe Generale maintains its strong bullish view on gold, primarily based on its optimistic assessment of the Federal Reserve's monetary policy. They expect the Fed to implement more aggressive easing measures. While inflationary pressures are expected to ease next year, potential risks in the US labor market are gradually emerging, further reinforcing the need for easing. Although the federal funds rate recently fell from 5.5% to 4%, the inflation-adjusted real interest rate remains high, indicating that overall monetary conditions remain relatively tight. The bank's economists predict an additional 50 basis point rate cut by April next year, largely in line with current market consensus. If this path materializes, it will push policy rates closer to a neutral level and gradually ease financial conditions.
Dual missions and political considerations: Interest rate policy will be strongly anchored
At a deeper level, the Federal Reserve's dual mandate—balancing inflation control and employment stability—coupled with pre-election political pressure to manage food prices, will serve as a strong anchor for policy rates throughout 2026. These dynamics will reinforce caution regarding further monetary tightening, while significantly increasing the likelihood of additional easing should economic growth face stronger headwinds. Overall, these factors collectively provide a solid foundation for the continued rise in gold prices.
The value of gold in portfolio diversification: unique advantages beyond capital appreciation
Beyond its significant expected capital appreciation, Société Générale also highly values gold as an intrinsic tool for portfolio diversification. Currently, the correlation between the US stock market and bonds remains higher than historical averages, implying a weakened risk diversification effect among traditional assets. In this environment, gold's low correlation is particularly valuable, effectively reducing overall portfolio volatility and enhancing long-term risk-adjusted returns.
Conclusion: A new era for gold is dawning; investors should plan ahead.
In conclusion, Societe Generale's latest view has injected strong confidence into the gold market. Driven by multiple positive factors, including expectations of further easing by the Federal Reserve, central bank gold purchases, and global uncertainties, gold will not only maintain its status as a safe-haven asset but is also expected to achieve a breakthrough rally in 2026. Although current prices are high, pullbacks present excellent buying opportunities. For investors seeking to preserve and grow their assets while diversifying their risk, gold is undoubtedly an indispensable core holding now and in the future.
At 11:30 Beijing time, spot gold was trading at $4287.38 per ounce.
Golden Allocation in Multi-Asset Portfolios: Steady Adjustments to Meet Market Challenges
As the new year approaches, market analysts at Societe Generale announced in their latest report that they will maintain their 10% gold allocation in their multi-asset portfolio. This decision reflects the bank's strong confidence in gold. At the same time, they significantly adjusted their exposure to other fixed-income assets: reducing their holdings of US inflation-linked bonds to zero and halving their corporate bond holdings to just 5%. This strategic adjustment aims to optimize the portfolio structure and achieve a more balanced risk diversification and return potential in an environment of weak overall fixed-income asset performance and a weakening dollar dragging down returns on dollar-denominated assets.
Asset price performance expands to include a wider range of assets: Gold leads the rise of multiple asset classes.
The analysts emphasized in their report that fixed-income assets faced significant challenges over the past year, with a weaker dollar further eroding the common currency returns of these assets. However, Societe Generale's multi-asset management platform achieved outstanding performance through balanced allocation. This success stemmed from their accurate grasp of the theme of broadened asset price performance, reflected not only in the strong rebound of various stock markets but also, and more notably, in the superior performance of alternative assets such as gold. Looking ahead, as US interest rates gradually decline, this broadened theme is expected to continue, providing strong support for physical assets such as gold.
Reiterating my bold price forecast: Gold will reach $5,000 by the end of 2026.
Societe Generale analysts have reiterated their aggressive gold price forecast, predicting that gold will reach $5,000 per ounce by the end of 2026. This target is particularly compelling in the current market environment, especially considering that the current spot gold price is near its all-time high of around $4,300. This prediction is not unfounded but based on a comprehensive assessment of global central bank diversification needs, rising investor risk aversion, and expectations of further monetary easing.
Retail investors are enthusiastic: buying on dips is the best strategy.
Retail investors are continuing to diversify their asset allocations, with a significant influx of gold into the market through gold bars, coins, and gold exchange-traded funds (ETFs). Analysts specifically point out that non-allied central banks will continue to accelerate their diversification away from dollar-denominated assets, and gold itself offers effective protection against various risks, including the possibility of the Federal Reserve adopting a more dovish stance following high-level personnel changes. Therefore, they strongly recommend that investors buy decisively when prices pull back to lock in long-term appreciation potential.
Expectations of a dovish Fed policy: Supporting the bullish outlook for gold
Societe Generale maintains its strong bullish view on gold, primarily based on its optimistic assessment of the Federal Reserve's monetary policy. They expect the Fed to implement more aggressive easing measures. While inflationary pressures are expected to ease next year, potential risks in the US labor market are gradually emerging, further reinforcing the need for easing. Although the federal funds rate recently fell from 5.5% to 4%, the inflation-adjusted real interest rate remains high, indicating that overall monetary conditions remain relatively tight. The bank's economists predict an additional 50 basis point rate cut by April next year, largely in line with current market consensus. If this path materializes, it will push policy rates closer to a neutral level and gradually ease financial conditions.
Dual missions and political considerations: Interest rate policy will be strongly anchored
At a deeper level, the Federal Reserve's dual mandate—balancing inflation control and employment stability—coupled with pre-election political pressure to manage food prices, will serve as a strong anchor for policy rates throughout 2026. These dynamics will reinforce caution regarding further monetary tightening, while significantly increasing the likelihood of additional easing should economic growth face stronger headwinds. Overall, these factors collectively provide a solid foundation for the continued rise in gold prices.
The value of gold in portfolio diversification: unique advantages beyond capital appreciation
Beyond its significant expected capital appreciation, Société Générale also highly values gold as an intrinsic tool for portfolio diversification. Currently, the correlation between the US stock market and bonds remains higher than historical averages, implying a weakened risk diversification effect among traditional assets. In this environment, gold's low correlation is particularly valuable, effectively reducing overall portfolio volatility and enhancing long-term risk-adjusted returns.
Conclusion: A new era for gold is dawning; investors should plan ahead.
In conclusion, Societe Generale's latest view has injected strong confidence into the gold market. Driven by multiple positive factors, including expectations of further easing by the Federal Reserve, central bank gold purchases, and global uncertainties, gold will not only maintain its status as a safe-haven asset but is also expected to achieve a breakthrough rally in 2026. Although current prices are high, pullbacks present excellent buying opportunities. For investors seeking to preserve and grow their assets while diversifying their risk, gold is undoubtedly an indispensable core holding now and in the future.
At 11:30 Beijing time, spot gold was trading at $4287.38 per ounce.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
