September 23, 2026
A price target of $5,250 per ounce and an unwavering commitment to real assets: Despite a persistently restrictive interest rate environment, Société Générale believes the upward cycle for precious and industrial metals is far from over.
In its latest multi-asset outlook for the fourth quarter of 2026, the major French bank reaffirms its clear overweight position in commodities and allocates 10 percent of the total portfolio volume to gold and copper alone. Behind this allocation lies a classic “debasement trade”: the growing realization that central banks cannot fully contain inflationary pressures, while the skyrocketing interest costs of U.S. government debt are eroding confidence in traditional bonds.
U.S. Debt Trap and Central Bank Purchases Cement the Gold Rally
The fact that 10-year U.S. Treasuries are yielding nearly 5 percent by no means diminishes the value of the interest-free precious metal in the current market environment. Rather, SocGen interprets the high yield level as a symptom of a structural sustainability crisis. With a budget deficit exceeding six percent of gross domestic product and an average interest rate on debt of four percent—well above the 2.3 percent threshold necessary for stabilization—the superpower’s interest payments are on track to rise to five percent of economic output by the mid-2030s. Against this fiscal backdrop, gold no longer serves merely as a hedge against inflation but as an indispensable bulwark against the creeping devaluation of government debt.
This macro driver is accompanied by unrelenting physical demand. Central banks worldwide are reducing their holdings of U.S. Treasuries in favor of gold bullion, while private inflows are also returning to the financial markets. Global holdings of gold ETFs are once again moving toward the 3,000-metric-ton mark. If the expected real interest rate cuts and a weakening of the U.S. dollar materialize as the cycle progresses, the opportunity cost of the metal will continue to decline. The bank therefore forecasts a gold price of $4,750 for the fourth quarter of 2026, before prices are expected to rise above $5,000 in the second quarter of 2027 and reach $5,250 by late summer 2027.
Copper: AI Infrastructure Meets Chronic Mining Slump
Analysts’ outlook for the copper market is equally positive; the bank forecasts a price of $14,750 per metric ton for the final quarter, which is expected to climb to $15,250 by the third quarter of 2027. Alongside electrification, the global expansion of data centers for artificial intelligence is emerging as a primary driver of demand. This additional demand is meeting production levels that, after a decade of chronic underinvestment, offer little room for volume expansion.
According to experts, global copper mine production declined by 1.1 percent in the first half of 2026 and is heading toward its first year of contraction in nearly a decade. Since lead times for new large-scale projects are lengthy, the bank does not expect any significant supply response from the mining sector before 2030. The combination of secular demand growth in the tech sector and structural commodity shortages thus establishes industrial metals as the second pillar of a market-wide revaluation.
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