Gold Price Slide Brings Critical Support Level into Focus
Société Générale's analysts have weighed in on the current gold market, suggesting that the precious metal is approaching a critical support level. The analysts pointed out that gold has struggled to sustain gains above its 200-day moving average, highlighting persistent downward momentum.
According to the report, if gold fails to reclaim the recent pivot high near $4,315, the decline may extend further. Analysts have identified key supports around the projection of $4,095 and the June/July troughs at $3,960/$3,940, which is a crucial zone.
SocGen maintains a 10% position in gold and a 10% position in broader commodities, unchanged from the third quarter. The bank has increased its equity allocation to 58% from 55%, while reducing its exposure to government bonds to 12% from 15%. Analysts expect gold's rally to have further room to run, forecasting prices at $4,750 an ounce in the fourth quarter and reaching $5,000 by the second quarter of 2027.
The analysts see a revival of the debasement trade, with geopolitical fragmentation and growing concerns about U.S. fiscal and currency credibility driving greater diversification away from traditional reserve assets. Central banks continue to buy gold while reducing their exposure to US Treasuries, as they seek alternative reserve assets.