SocGen Raises Gold Price Forecast to $6,000 Amid Rally

As gold prices surge past $5,000 an ounce just one month into the year, major banks are racing to revise their expectations. Société Générale has become the latest international bank to issue a significant upgrade, boosting its 2026 gold price forecast from $5,000 to $6,000 per ounce.

In a report published Monday, the French bank’s commodity analysts noted that even this new target may be cautious. "This is probably a conservative estimate and it could well go higher," they wrote, signaling strong underlying momentum in the market.

Investment Demand Fuels Unprecedented Climb

According to SocGen, relentless investment demand is the primary engine driving gold prices higher through 2026. While hedge funds may not have exceptionally large long positions, their total notional holdings have hit an all-time high of $78 billion—surpassing the previous record from September 2025 by $2 billion.

This growing investor appetite is having a magnified effect on prices, meaning smaller inflows can now produce larger gains. The report highlights several key data points:

• ETF Inflows: Gold-backed ETFs have seen positive flows for eight consecutive weeks, accumulating 93 tons. This is the longest streak of inflows since an 11-week period in April 2025.

• Total Holdings: Total ETF tonnage now stands at 3,120 tons, a 500-ton increase from a year ago.

• Price Sensitivity: The market's reaction to these flows has become more pronounced. Since 2010, an inflow of 100 tons into gold ETFs typically resulted in a 3.6% price increase. However, since October 2025, that same volume has corresponded to a 9.2% price jump, helping to explain the 29% rally since that time.

Central Bank Buying Shows Signs of Slowing

Despite the bullish investor sentiment, SocGen identifies a potential headwind: slowing demand from central banks. While these institutions remain net purchasers of gold, the rapid price appreciation appears to be tempering their activity.

Evidence for this slowdown comes from trade data published by the British HM Revenue & Customs. Analysts pointed to a notable decline in gold exports from the United Kingdom in November.

• Total exports to all destinations were just 19 tons, far below the November average of 127 tons since 2022 and the 61-ton average since 2015.

• China, a primary destination, accounted for only 10 tons of exports. This figure is a sharp drop from the 51-ton average for November since 2022 and also below the 12-ton average since 2015.

London Vault Data Confirms Easing Demand

This trend is further supported by vault data from the London Bullion Market Association (LBMA). SocGen's analysts emphasize the "very tight" correlation between UK gold export activity and the amount of gold held in London's vaults.

The LBMA reported a 199-ton build in vault holdings for December. Historically, such a significant increase in inventory aligns with periods of very low export levels—sometimes as little as four tons for the entire month. Based on seasonal averages since 2022, a build closer to 100 tons would have been expected.

The report concludes that an analysis of the ten months with the largest inflows into LBMA vaults consistently reveals low export activity, which serves as a proxy for central bank buying. During these periods, exports averaged just 12.2 tons.