Société Générale stays bullish on gold as fiscal risks mount

The French lender is betting that geopolitical fragmentation and waning confidence in U.S. fiscal credibility will drive investors toward alternative assets. While rising bond yields typically pressure non-yielding commodities, analysts suggest current borrowing costs reflect deeper concerns regarding sovereign debt sustainability. With U.S. net interest outlays climbing toward 5% of GDP, the bank has trimmed its government bond exposure from 15% to 12%.

Beyond gold, the firm remains optimistic about copper, projecting prices to hit $14,750 a tonne late this year. Supply constraints are expected to persist, as mine production faces its first annual contraction since 2017. Analysts point to a decade of underinvestment as a primary hurdle, noting that a meaningful supply response is unlikely before 2030. As ETF holdings rebound toward 3,000 tonnes, the bank views these commodities as essential hedges against climate and geopolitical volatility.