Societe Generale, France’s third-biggest listed bank, is planning a partial comeback to gold trading after quitting the bullion market in 2019, two sources with knowledge of the matter told Reuters.
Societe Generale resigned as a market maker for gold at the London Bullion Market Association (LBMA) in 2019 as it downsized over-the-counter (OTC) commodities trading, where deals are done bilaterally between banks and brokers.
The bank plans to focus on the trading of gold derivatives only, the sources said, adding that it has no plans to hire a large team or to become the LBMA market maker again. London is the world’s largest OTC gold trading hub, overseen by the LBMA.
Societe Generale declined to comment.
With its return, Societe Generale joins Japan’s trading house Mitsui & Co, which also plans to re-enter global precious metals trading to hedge client risk after a nine-year absence, as bullion’s blistering 2024 rally inflated activity in the sector.
Last year, gold prices soared 27%, the most in 14 years, hitting multiple record highs amid safe-haven demand, central bank rate cuts and official sector buying.
The World Gold Council estimates that gold trading volumes across global markets rose by 39% to an average of $226.3 billion a day in 2024, the highest on record.
Since touching an all-time high of $2,790.15 on Oct. 31 the spot gold price fell by 3% as investors weighed how US President-elect Donald Trump’s policies would impact the economy and inflation.
(By Polina Devitt and Mathieu Rosemain; Editing by Veronica Brown and David Evans)
