Societe Generale states that gold remains in a broad bull market in 2026, with ETF, futures and options positions strengthening simultaneously. This shows demand from different types of investors is combining, and this rally is no longer driven merely by short-term speculation.

Analysts Michael Haigh and Jeremy Sellem of the bank pointed out on Monday that gold has entered a new phase of its 2026 bull market, characterized by "structural conviction" rather than pure momentum trading. They said the rally initially sparked by geopolitical shocks has evolved into "a synchronized build-up of physical gold, futures and options exposure", covering retail investors, professional money managers and derivatives traders.

Record-Breaking ETF and Position Data

Societe Generale said gold ETF demand was "historically strong" in August, registering net inflows of 201 tonnes for the month. In tonnage terms, this marked the third-largest monthly increase on record, only behind February 2009 and March 2020. The bank noted that this inflow exceeded the robust buying seen after the Russia-Ukraine conflict broke out in March 2022 and after the Federal Reserve announced QE3 in September 2012.

In terms of nominal exposure (number of contracts × price × contract size), money managers’ net long positions hit the second-highest level on record, only trailing January 2026 when gold topped $5,400 per ounce to set an all-time high. The analysts stressed that gold prices are roughly $1,000 lower than that level, yet the dollar exposure is even more striking, indicating "this is no longer just a price story".

Societe Generale believes the current market positioning structure remains favorable for gold prices over the medium term. It said investors seem to hedge short-term uncertainty via put options while continuously building call option exposure for longer tenors, consistent with a positive outlook for gold in the medium run.

Renewed Bullishness After Pullbacks

The bank said last week that after cutting gold positions in the first half of this year, precious metals have become attractive again. The analysts said gold has recently rebounded to around $4,500 per ounce from a sharp drop triggered by conflicts between the US, Israel and Iran as well as rising Fed rate hike expectations.

Societe Generale added that market bullish sentiment is picking up again as volatility normalizes, speculative positions climb above the two-year average, and the GLD put/call ratio falls to a six-month low. The bank therefore maintains its "strategically bullish" stance on gold and regards it as a key hedge against monetary and policy uncertainties.

The analysts also pointed out that the gold market has undergone obvious structural changes since 2022. Even with peRSIstently positive real interest rates, gold prices stay near historic highs, departing from the lower price ranges implied by traditional models. Supporting factors include sustained central bank gold purchases, de-dollarization trends, geopolitical uncertainties and sovereign debt concerns. These factors have lifted gold’s price floor and softened downward pressure from high real interest rates.

High-Rate Pressure Partly Absorbed

Societe Generale said since mid-last year, market expectations have shifted from further eASIng to discussions over whether the Fed will deliver one or two more rate hikes. This shift has pushed the 2-year US Treasury yield back above 4% and underpinned the US dollar.

Nevertheless, the bank believes gold prices remain markedly above mid-2025 levels despite these traditional bearish factors. The analysts said a "larger inflation shock" and a "more aggressive Fed response" would be required to trigger another major repricing of gold. In their view, financial markets have priced in most hawkish repricing, so gold’s downside risks are growing limited.

This assessment comes as gold attempts to recoup losses from sharp pullbacks in spring and early summer. Markets had previously worried that the Fed might be forced to raise rates again, which was one of the major headwinds weighing on gold. At the Jackson Hole Economic Policy Symposium last week, Fed Chair Kevin Warsh delivered hawkish remarks, reiterating that policymakers remain focused on sustainably bringing inflation back to the 2% target and reviving rate hike expectations.

Inflation Environment May Offer More Support

Societe Generale believes the Fed has limited room to tighten monetary policy further. Its economists expect rates to stay unchanged until 2027 under the base case, yet they acknowledge that stubborn inflation could still force policymakers to hike once this year. The bank sees higher odds of a rate increase in September or December than in October.

At the same time, Societe Generale said peRSIstent inflation is another reason investors should keep strategic allocations to gold. It noted that new US tariffs, accelerated investment in artificial intelligence and infrastructure, volatile energy prices and peRSIstently high fiscal deficits in advanced economies are creating a more inflationary environment than financial markets currently anticipate.

The bank also mentioned that markets had only priced in modest additional Fed tightening expectations at the time of the report release. Even these anticipated hikes are not enough to align monetary policy with the Atlanta Fed’s Taylor Rule model, meaning inflation risks remain underpriced.

Central Bank Buying Forms Key Support

Beyond the improved macro backdrop, Societe Generale said gold’s underlying demand structure also offers solid support. Although gold ETF inflows have slowed notably this year compared with earlier periods, they remain positive overall. Meanwhile, falling volatility is boosting gold’s appeal to long-term reserve managers, rather than only attracting short-term momentum traders.

The analysts believe this shift may ultimately build a more durable foundation for the precious metal. The bank pointed out that China continues to steadily increase its gold reserves, and diveRSIfied allocation away from traditional reserve assets remains a structural priority for many emerging market central banks.

Societe Generale stated that as speculative demand fades and official-sector buying stays robust, central banks are increASIngly becoming the key anchor of the gold market. It also said falling volatility has historically served as an important buy signal for gold, and sustained central bank demand should provide a more enduring floor for gold prices.