Gold holds above $4,000 as managers flip to undervalued

Gold is holding above $4,000 as fund managers turn bullish on the metal for the first time in more than three years, but technical resistance and Fed rate uncertainty threaten the recovery.

COMEX gold held above $4,000 an ounce on July 23, extending a 3.5% rebound from the $3,900-$4,000 support zone that has contained selling since the metal's 26% drawdown from its $5,598 record.

A net 6% of institutional managers now call gold undervalued, the first negative overvaluation reading in more than three years, according to Bank of America's July Global Fund Manager Survey of 181 managers overseeing $484 billion in assets.

The sentiment shift follows a repricing that pushed gold into bear market territory earlier this month. The last time the survey flipped this way, in March 2023, gold traded below $2,000 before rallying to $5,598 by January 2026. Average cash levels dropped to 3.6% of assets from 4.1%, triggering the contrarian sell signal under BofA's Cash Rule for risk assets — but not for gold, which sits at the opposite extreme of positioning.

The $4,000 level coincides with the long-term 0.5 Fibonacci retracement at $3,943, where buyers have stepped in twice this month. The next test is the descending trendline from the all-time high, now converging near current levels. A rejection would expose the 0.618 golden pocket at $3,552, about 14% below. Next week's Federal Reserve decision and a proposed 10-day US-Iran truce are the nearest catalysts.

Fund Manager Survey Flips for First Time Since 2023

The July edition of the BofA survey polled 181 managers overseeing $484 billion in assets. Through 2025 and early 2026, the same survey showed extreme readings, with a net 40% or more of managers calling gold overvalued near the January peak. The valuation call stands out because managers are anything but cautious elsewhere — a record 82% named long semiconductor stocks the most crowded trade, while 45% called an AI bubble the biggest tail risk.

Technical Levels Define the Next Move

The daily relative strength index has recovered to 52, back in neutral territory after weeks of suppressed readings. The first barrier is the descending trendline drawn from the $5,598 all-time high. Beyond it, the $4,300-$4,400 resistance zone coincides with the 0.382 Fibonacci retracement at $4,334, roughly 4% to 6% above the current price. On the downside, a break below $3,950 would expose the $3,850 area.

Silver, which often leads gold in directional moves, is testing support at $55 an ounce. A break below that level would open the door to the $45-$55 accumulation zone, where long-term buyers have historically stepped in. The gold-silver ratio stands at roughly 75, above its historical average of 60, suggesting silver may offer more upside if gold continues to recover.

This article is for informational purposes only and does not constitute investment advice.