After 6 months of brutal correction, gold seems to be making a comeback. According to the data, the yellow metal has indeed reached a floor around $4,200 per ounce. Some analysts are even already anticipating a rebound towards $4,400. For them, it is not a simple technical development. It is also accompanied by a reversal of sentiment among institutional investors. According to the latest Bank of America survey, fund managers now judge the precious metal to be undervalued for the first time in more than three years. Sustainable trend or simple adjustment before the next cycle? Decryption.
In brief
- Fund managers judge gold to be undervalued for the first time since March 2023.
- The yellow metal rebounded by 3.5% after defending the support of $3,900 to $4,000.
- Crossing $4,300-4,400 will determine the continuation of gold’s rebound.
The tide is turning on the gold market
Each month, Bank of America’s financial analysis division publishes the Global Fund Manager Survey. Closely followed by institutional investors, this survey is based on responses from 180 to 210 managers representing nearly $500 billion in assets under management.
The June 2026 edition was conducted from June 5 to 11 with 198 panelists managing $540 billion in assets. It shows that the net percentage of managers viewing gold as overvalued has fallen to its lowest level since February 2024.
In January, 45% considered it overvalued. A record since 2012! This reversal, however, is not trivial. It means that institutional investors, who had dealt gold like a speculative bubblenow accept it as a reasonably valued asset. This perception is accompanied by a strong macro conviction: 58% of managers identified stagflation as their base scenario over 12 months.
In mid-July, BofA published a new survey carried out from July 2 to 9. This time, it collects the opinions of 210 managers administering 555 billion dollars. The verdict is quite different:
- growth expectations are at their highest since February 2026;
- inflationary fears have fallen (only 4% net anticipate a price rise vs. 45% in June);
- equity allocations have climbed.
Two underlying trends explain this apparent divergence
The first is time lag. Indeed, the June survey captured sentiment at the height of the correction, when gold was flirting with $4,200. That of July highlights the rise in equity markets to the detriment of defensive assets.
Second factor (and the most underestimated): cash level of funds. It fell to 3.6% in July, its lowest since February 2026.
In this context, Bank of America relies on a well-known rule of thumb: when cash falls below 4%, it is a sell signal for stocks. History since 2002 shows that such a signal is usually followed by a 1% decline in stocks over two weeks. Conversely, Treasuries take the advantage.
Decryption: gold is not rebounding despite optimism, but because it has become excessive.
Gold rebounds despite persistent institutional appetite for stocks
According to survey results published by BofATHE average level of cash held by managers drop from 4.1% to 3.6% of portfolios. According to the Bank of America Cash Rule, any level less than or equal to 4% triggers a contrarian sell signal in the markets.
The other results of the survey illustrate this offensive positioning:
- 82% of respondents consider long positions in semiconductor-related stocks to be the most crowded trade on the market;
- 45% identify an AI bubble as the top tail risk;
- 83% do not anticipate any rate hike from the Fed before the US mid-term elections scheduled for November.
Gold thus appears as one of the rare assets still neglected by major investors. If a correction in the stock markets materializes, part of the capital could be redirected towards the precious metal.
The Bank of America, however, recalls that its investigation took place from July 2 to 9, before several geopolitical developments. In particular, reference is made to the failure of the ceasefire between the United States and Iran. That propelled oil above $90 a barrel and reignited expectations of tighter monetary policy.
Gold’s technical rebound remains to be confirmed
The change in sentiment is accompanied by a first encouraging signal on the chart. In two sessions, gold is indeed increasing by around 3.5% after defending the support zone between $3,900 and $4,000. During the last session analyzed, the metal gained another 1.74% to close at $4,148. This is its highest level since July 7.
This area corresponds to the 50% Fibonacci retracement located at $3,943. Technical analysts often refer to it as golden ratio. The indicators also show a gradual improvement in momentum. For example, the relative strength index (RSI) rose to 52. It thus returned to a neutral zone after several weeks of weakness.
Upstream, the gold price still trading below the downtrend line drawn from the all-time high of $5,598. The first major resistance lies between $4,300 and $4,400, with a Fibonacci level at $4,334. This equates to around 4% to 6% above current prices.
A rejection below this resistance could take the metal back towards the $3,552 zone. The latter corresponds to the 61.8% Fibonacci retracement, i.e. a potential decline of around 14%.
In any case, the managers have decided: gold has not been so cheap for three years. It remains to be seen whether the market will follow! The Fed’s decision and the outcome of the Iran-United States truce will undoubtedly provide a first response next week. File to follow…
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