A team of analysts at Societe Generale points out that the gold market will be in a full-blown bull market in 2026, with positions across ETFs, futures, and options all showing positive growth. Multiple independent demand channels are mutually reinforcing each other, providing ample and sustainable upward momentum for gold prices. Analysts Michael Haig and Jeremy Salem stated in their research report: "The gold bull market in 2026 has entered a new phase. The core of the market is no longer driven by short-term speculative funds, but by a broad and structurally-driven bullish consensus among all market participants." This round of gold price increases was initially triggered by geopolitical risks, but after several months of evolution, the supporting logic has been completely upgraded: retail investors, professional asset management institutions, and derivatives traders have all increased their holdings, and exposure to physical gold, gold futures, and gold options has expanded across the board, building a diversified and solid foundation for the rise. Fund Holdings: ETFs and Institutional Long Positions Reach Historic Scale Societe Generale emphasized that the gold market's demand for funds reached a historic high in August 2026, supporting the resilience of gold prices. Gold ETFs saw a net inflow of 201 tons in August, the third highest monthly increase in global gold ETF history, second only to two major crisis periods: February 2009 when the Obama administration launched its economic stimulus plan, and March 2020 when the global COVID-19 pandemic led to widespread lockdowns. This inflow even surpasses the gold rush following the Fed's QE3 in September 2012 and the outbreak of the Russia-Ukraine conflict in March 2022, sufficiently demonstrating the current strength of demand for gold allocation. From an institutional holdings perspective, asset management institutions' net long nominal exposure to gold (contract quantity × price × contract multiplier) has reached the second highest level in history, second only to the period in January 2026 when gold prices broke through $5,400/ounce and set a new historical high. It is worth noting that although the current gold price has fallen by nearly $1,000/ounce from its January high, the scale of institutional dollar-denominated holdings has still increased significantly, indicating that this round of gold price increases is no longer simply price speculation, but rather a genuine capital allocation behavior. Options Structure: Optimistic Market Sentiment, Clear Medium-Term Upside Expectations From the perspective of the options market structure, the current gold market expectation presents a rational pattern of "short-term safe-haven demand and medium-term bullish sentiment," providing strong support for the medium-term upward movement of gold prices. Investors generally hedge short-term market uncertainties by buying put options, while continuously increasing their long-term call options positions, fully reflecting the market's constructive and optimistic expectations for the medium-term trend of gold. Looking back at recent market movements, gold previously experienced a deep correction due to the geopolitical conflict between the US, Israel, and Iran, and the rising expectations of a Fed rate hike, before quickly rebounding to the $4,500/ounce level. With the market recovery, volatility has returned to normal, speculative positions have rebounded above the two-year average, and the GLD gold ETF put/call ratio has fallen to a six-month low, indicating a comprehensive recovery in bullish sentiment. Macroeconomic headwinds have subsided: the negative impacts of high interest rates and a strong dollar have been fully digested . The two major negative factors for gold widely considered by the market—a high-interest-rate environment and a strong dollar—have significantly weakened in influence. Societe Generale analysis points out that the financial market has already priced in expectations of a hawkish monetary policy from the Federal Reserve, significantly improving the risk-reward ratio for gold. The bank maintains a strategic bullish stance on gold, defining it as a core safe-haven asset to hedge against global currency volatility and policy uncertainty. The global market landscape has fundamentally changed since 2022, breaking the traditional gold pricing model: even with current real interest rates remaining positive, gold prices remain firmly in historically high ranges. Four structural positive factors have built a solid bottom for gold prices, offsetting the downward pressure from high real interest rates: first, continued gold purchases by global central banks; second, the ongoing global de-dollarization process; third, the normalization of geopolitical risks; and fourth, the escalating sovereign debt risks of various countries. Fed Policy Outlook: Limited Tightening Room, Narrowing Downside Risks for Gold Since mid-2025, market expectations for monetary policy have completely reversed, shifting from "continued easing" to "tail-end Fed rate hikes," pushing the two-year Treasury yield above 4% and strengthening the dollar, creating a temporary downside. However, gold prices have not fallen; instead, they remain well above mid-2025 levels, demonstrating resilience. Societe Generale believes the Fed has very little room for further significant tightening: only an unexpected inflationary shock coupled with extremely aggressive Fed rate hikes could trigger a significant revaluation of the interest rate system, thereby suppressing gold prices. Currently, the market has fully priced in the Fed's hawkish policy expectations, and the downside risks for gold continue to narrow while upside potential gradually opens up. Regarding the subsequent policy path, Societe Generale's baseline forecast is: the Fed will maintain interest rates unchanged in 2027. If inflation remains high, there may only be one rate hike in 2026, with the probability of a September or December hike far exceeding that of October. Even with the Federal Reserve's late-stage rate hikes, monetary policy still falls short of the Atlanta Fed's Taylor rule, meaning current market inflation risks are severely underestimated, further highlighting gold's value as an inflation hedge. Inflation Logic: Multiple Factors Fuel a High-Inflation Environment, Supporting Gold Investment Societe Generale emphasizes that persistently high inflation is one of the core reasons for its long-term bullish outlook on gold. Current global inflationary pressures far exceed market expectations. Four factors are continuously driving global inflation: the implementation of a new round of US tariffs, accelerated investment in artificial intelligence and infrastructure, significant fluctuations in international energy prices, and persistently high fiscal deficits in developed economies. This confluence of positive factors creates a long-term inflationary environment, benefiting gold's value preservation attributes. Demand Structure Upgrade: Central Bank Gold Purchases Become a Core Stabilizer in the Gold Market The current gold market demand structure continues to optimize, shifting from short-term speculation to a dual-driven model of long-term allocation and official gold purchases, significantly enhancing market sustainability. Although the inflow of funds into gold ETFs slowed in 2026, it maintained a net inflow trend; simultaneously, declining market volatility significantly increased gold's attractiveness to long-term reserve institutions, completely eliminating the emotional disturbances of short-term speculative funds. Global central banks continue to actively increase their gold reserves, with many emerging market central banks further diversifying their foreign exchange reserves and reducing their reliance on dollar assets, resulting in stable long-term demand for gold. Societe Generale summarizes that short-term speculative demand is gradually receding, while official central bank gold purchases remain robust, making central banks the core ballast of the gold market. Furthermore, historical data shows that declining market volatility is a classic buy signal for gold, and coupled with continued central bank support, the bottom support for gold prices is extremely solid.