Societe Generale, France's third-largest listed bank, is considering a return to gold trading after exiting the bullion market in 2019, according to two sources familiar with the matter. The bank withdrew from its role as a market maker for gold at the London Bullion Market Association (LBMA) in 2019 while downsizing its over-the-counter (OTC) commodities trading.
The plan is for Societe Generale to focus solely on trading gold derivatives, without intentions to significantly expand its team or resume its role as the LBMA market maker. London, overseen by the LBMA, serves as the world's largest OTC gold trading hub.
Societe Generale has declined to provide a formal comment on the matter.
In a similar move, Japan's trading house Mitsui & Co has also decided to re-enter global precious metals trading after a nine-year hiatus to hedge client risk amid the rapid rise in activities within the sector due to the bullish 2024 rally in bullion prices.
Gold prices surged by 27% last year, marking the largest increase in 14 years, propelled by safe-haven demand, central bank rate cuts, and increased buying within the official sector.
According to the World Gold Council, global gold trading volumes saw a 39% increase in 2024, reaching a daily average of $226.3 billion, the highest on record. Despite hitting an all-time peak of $2,790.15 on Oct. 31, the spot gold price experienced a 3% decline as investors assessed the potential impact of U.S. President-elect Donald Trump's policies on the economy and inflation.