SocGen Sees Gold Reaching $5,250 an Ounce by Mid-2027 as Central Banks Struggle with Inflation

Société Générale, a French bank, remains bullish on gold prices in Q4 as central banks won't get ahead of inflation. According to analysts at SocGen, despite interest rate hikes from central banks, they are unlikely to outpace the inflation curve.

The bank is maintaining its overweight position in equities and commodities, with a 10% allocation to gold and a 10% allocation to broader commodities. Its equity allocation has increased to 58%, while its exposure to government bonds has decreased to 12%. The analysts believe that commodities are an essential asset class for hedging against geo-political and climate risk.

SocGen expects lower real interest rates later in the cycle, reduced gold's opportunity costs as a non-yielding asset. It also sees weakness in the US dollar and renewed investment demand providing tailwinds for gold.

The bank forecasts gold prices at $4,750 an ounce in Q4 before reaching $5,000 by mid-2027 and $5,250 by the end of that year. For copper, SocGen expects a price of $14,750 a tonne in Q4 2026, holding at that level in Q1 2027 before rising to $15,000 in Q2 and $15,250 in Q3.