Gold Most Undervalued in 3 Years, Fund Managers Say. Is the Bottom In?
Fund managers now see gold (XAU) as the most undervalued asset since March 2023, in line with Bank of America’s July survey. The studying arrives as the metallic bounces 3.5% in two days from the $3,900-$4,000 assist zone.
The final time the survey flipped this fashion, gold traded beneath $2,000 after which rallied to $5,598 in January. Whether historical past repeats might rely on the Federal Reserve and a potential US-Iran truce.
Fund Managers Flip on Gold for the First Time Since March 2023
The July version of the BofA Global Fund Manager Survey polled 181 institutional managers overseeing $484 billion in property. A internet 6% of them now name gold undervalued, the first unfavourable overvaluation studying in greater than three years.
The shift is dramatic. Through 2025 and early 2026, the similar survey confirmed excessive readings, with a internet 40% or extra of managers calling gold overvalued close to the January peak.
Sentiment has reset after a brutal repricing. Gold trades about 26% beneath its file, a drawdown that already pushed the metallic into bear market territory earlier this month.
The market information account Barchart highlighted the sign on X, noting that gold is now the most undervalued in greater than three years. In March 2023, an equivalent setup preceded a rally that almost tripled the worth.
Cash Levels Trigger a Sell Signal Everywhere Except Gold
The valuation name stands out as a result of managers are something however cautious elsewhere. Average money ranges dropped from 4.1% to 3.6% of property, as first reported by analizy.pl. Any studying at or beneath 4% triggers the contrarian promote sign underneath BofA’s Cash Rule.
Positioning appears to be like stretched throughout threat property. A file 82% of respondents named lengthy semiconductor shares the most crowded commerce, whereas 45% known as an AI bubble the largest tail threat. Meanwhile, 83% count on no Fed hike earlier than the November midterm elections.
Gold sits at the reverse excessive, unloved and uncrowded. If the money sign precedes an fairness correction, solely the main asset managers that contemplate low cost may change into the pure rotation targets.
One caveat issues. The survey ran from July 2 to 9, earlier than the ceasefire collapse despatched oil above $90 and revived the hawkish Fed chorus. Managers’ common year-end oil forecast of $71 already appears to be like stale.
XAU Bounces From $3,900 Support, however the Trendline Caps the Recovery
The each day chart reveals the sentiment reset coinciding with a technical response. Gold gained 1.74% on Wednesday to $4,148, its highest shut since July 7, after defending the $3,900-$4,000 assist zone.
That inexperienced zone corresponds to the long-term 0.5 Fibonacci retracement at $3,943. Buyers stepped in precisely the place the golden ratio recommended they need to, echoing ranges flagged in a earlier gold outlook.
Momentum is quietly enhancing. The each day RSI is trending larger to 52, again in the impartial zone after weeks of suppressed readings. An analogous restoration just lately powered a breakout in silver.
However, the long-term construction stays bearish. The worth nonetheless trades beneath the descending trendline drawn from the $5,598 all-time high, which now converges close to present ranges.
The first barrier is the trendline itself. Beyond it, the $4,300-$4,400 resistance zone coincides with the 0.382 Fibonacci retracement at $4,334, roughly 4% to six% above the present worth.
Rejection at the trendline would expose the 0.618 golden pocket at $3,552, about 14% beneath the present worth. Next week’s Fed determination, with markets pricing roughly 60% odds of a September hike, and the proposed 10-day US-Iran truce stand as the nearest catalysts.
Fund managers have marked gold as low cost. Now the chart should determine whether or not they’re early or just flawed.
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