The French banking giant suggests that the gold market is currently caught in a delicate balance, heavily influenced by the trajectory of global monetary policy. With the Federal Reserve signaling a pause, the European Central Bank maintaining a hawkish stance, and the Bank of Japan gradually tightening, the opportunity cost of holding a non-yielding asset remains high. Analysts anticipate that inflationary pressure across the U.S. and Europe will linger until early 2027, providing only fleeting support for gold’s traditional role as a hedge.

Société Générale identifies two primary macroeconomic scenarios for the near term: an AI-driven cycle of inflationary growth that necessitates tight policy, or an energy-induced stagflation shock resulting from supply disruptions. In either case, the bank predicts that policy stability will prevail over easing. Even when real yields eventually decline and the dollar softens, gold’s recovery will likely face resistance from resilient global growth and a sustained investor preference for riskier assets. While physical demand, particularly in the jewelry sector, may offer marginal stability, the lack of momentum in ETF inflows and a cooling of central bank purchases suggest that any significant upside for the metal remains a distant prospect.