After a brutal six-month slide, gold is showing signs of resilience, sparking fresh interest from institutional investors. The precious metal found a strong support zone near $4,200 an ounce, rebounding by 3.5% from the $3,900-$4,000 range. For the first time in over three years, fund managers surveyed by Bank of America now see gold as undervalued rather than overpriced, signaling a notable sentiment shift.

Fund Managers Reevaluate Gold's Value

Bank of America's June 2026 Global Fund Manager Survey, based on responses from 198 managers overseeing $540 billion, revealed a sharp decline in those viewing gold as overvalued. Back in January, 45% of managers judged gold overpriced, a record high since 2012. This winter meltdown in confidence gave way to a more measured outlook as investors began to embrace gold as a reasonably priced asset amid persistent economic uncertainty.

The macroeconomic backdrop plays a key role: 58% of surveyed managers cited stagflation as their baseline scenario for the coming 12 months, adding weight to gold’s appeal as a hedge.

Contrasting Signals from July Survey

However, the mood shifted in early July, when a fresh survey of 210 fund managers controlling $555 billion showed a different picture. Growth expectations hit their highest point since February 2026, inflation concerns dropped sharply, and equity allocation rose. This divergence partly reflects timing: June’s survey captured sentiment amid the gold price correction while July’s emphasized a growing appetite for riskier assets as stock markets gained ground.

Another vital factor is cash levels in funds, which dropped to 3.6% in July, the lowest since February 2026. Bank of America points out that when cash reserves dip below 4%, history since 2002 indicates it often signals an upcoming stock sell-off, challenging the sustainability of the equity rally.

Key Levels to Watch for Gold

For gold to confirm its rebound, breaking through the $4,300-$4,400 resistance range will be critical. Should it succeed, the metal could solidify its turnaround and attract further institutional interest. Until then, markets remain cautious as investors juggle competing views on inflation, growth, and risk appetite.

The recent shift in gold sentiment comes amid a broader reshuffling in asset allocations, with some investors reducing exposure to riskier assets in favor of safer havens. This dynamic is visible in adjacent markets as well, contrasting with trends like tech stocks’ downturn and fluctuating crypto interest.