Gold price remains high, a French bank still increases its holdings of precious metals

A major investment bank is still looking to increase its gold holdings as a defense measure as the US Federal Reserve (FED) prepares to launch a new interest rate cutting cycle, despite high inflationary pressures.

On Wednesday, analysts at Societe Generale (SocGen) announced that they have adjusted their quarterly multi-asset strategy portfolio. After about a year of holding the gold ratio at 7%, the bank has increased the gold ratio to 10% of the total portfolio.

This move comes with the withdrawal of all 3% of capital from the oil market - a position established before the third quarter of 2025.

The Fed loosens interest rates amid high inflation and difficulties in cutting rates. We strengthen protection by: i) increasing the share of gold to the maximum (+3 percentage points to 10%), making gold the only commodity in the portfolio; II) holding US bonds with inflation at a maximum of 5% the report stated.

SocGen said it has maintained a gold glut since the end of 2022. The bank forecasts gold prices to average around $3,825/ounce in the fourth quarter of 2025 and around $4,128/ounce in 2026.

From an asset allocation perspective, we see gold as the dominance of the US dollar is being challenged. The main drivers supporting gold remain very solid, the analysts said.

They believe that falling interest rates and high inflation will reduce real yields, boosting demand for gold as a place to store value. The trend of diversifying foreign exchange reserves out of the US dollar continues to turn gold into an important monetary asset. The bank also stressed that central banks continue to buy gold despite high prices.

While increasing gold holdings, SocGen returned to a bullish view on oil. The bank said that geopolitical risks have not disappeared but have been postponed compared to supply-demand factors. They kept their forecast for Brent oil prices at $60/barrel at the end of 2025 and $52/barrel at the end of 2026.

In addition to goods, SocGen only slightly adjusted other items, expecting the FED to soon cut interest rates while the US economy remains relatively stable.

History shows that the Feds obvious easing has helped global stocks, not just the US, increase, so we have increased the global stock market share to 27% and reduced cash to 5%, the report said.