The gilded refuge: uncertainty forges our new $5,000/oz Gold outlook - Société Générale

All that glitters is fear: Gold's ascent toward $5,000/oz seems increasingly inevitable: Last week, Gold prices reached $4,042/oz, just $276/oz below the bullish $4,318/oz Q426 forecast published just one month ago. As of this morning, prices have risen to $4,072/oz. ETF flows remain strong, central bank buying expected to be resilient, Société Générale's comodity analysts note.

Chinese ETF Gold holdings rise to slightly 193t from 189t

"We now see prices reaching $5000/oz by the end of 2026, as the rate of flows has surpassed our initial assumptions. Despite having no clarity on positioning (flows) of hedge funds, we have observed what can only be described as extremely strong, admittedly higher than we forecasted, positive ETF flows in the last few weeks.1 Why is this increase in flows happening now? We have previously noted a strong relationship between ETF flows and uncertainty levels since the Trump victory in November 2024 and believe for now, this to be a critical factor in understanding part of the price action."

"We have to recognise, of course, some uncertainty indices are only published on a monthly basis and would therefore have failed to take into account the fact that China unveiled sweeping export controls on rare earths on October 9th (the Chinese uncertainty index, shown below, was calculated using data through to the end of September)."

"This index would also fail to capture that President Trump then announced, last Friday, to impose additional 100% tariffs on all Chinese goods and almost immediately signal openness to reach a deal to quell trade tensions. However, stepping back from these recent events, we do note that in China the general (and trade) uncertainty indices dropped 80 (100) points during the month of September, yet Chinese ETF Gold holdings rose to slightly 193t from 189t."