Societe Generale Bank (SocGen) has just created more momentum for the market by strongly raising its gold price forecast for 2026 to 6,000 USD/ounce, instead of the 5,000 USD level released in December. Notably, this organization itself admitted that the new figure may still be just a "cautious scenario".
SocGen's forecast jump took place in the context that gold just exceeded the 5,000 USD/ounce mark in the first month of the year - a surge that forced many global financial institutions to adjust the entire valuation model.
In a report released on Monday, SocGen's commodity analysis team said that investment capital will continue to be the main driving force pulling gold up at least until 2026. Although hedge funds have not opened outstanding buying positions, the nominal value of positions has now reached a record level of 78 billion USD, exceeding 2 billion USD compared to the peak of September 2025.
According to SocGen, the sensitivity of gold prices to cash flow is increasing sharply. In just 8 weeks, gold ETF funds net absorbed 93 tons, raising total holdings to 3,120 tons, 500 tons higher than the same period last year. This is the second long net absorption chain since April 2025.
If in the period 2010-2024, each 100 tons of gold flowing into ETF only increased the price by 3.6%, then from October 2025 to now, the impact has increased to 9.2%, explaining the 29% increase in gold prices since the beginning of October.
However, SocGen warns of a risk in the important buyer group: Central banks are slowing down buying as prices rise too high. Data from HM Revenue & Customs (UK) shows that gold exports in November were only 19 tons, much lower than the average of 127 tons in November in the period from 2022.
Exports to China fell sharply to 10 tons, far below the average of 51 tons in November in the past two years. Data from the London Gold Market Association (LBMA) also shows that gold inventories in December increased by 199 tons - a historical sign showing that purchases from central banks are very low, averaging only 12.2 tons/month.
However, SocGen believes that this stagnation is not enough to reverse the trend. Investment capital flows - the factor creating a non-linear impact on gold prices - are the leading variables in the market this year.
