Gold Hits 3 Year Undervalued Low As Fund Managers Pivot

Major institutional fund managers now see gold as the most undervalued asset since March 2023, according to a recent Bank of America survey. This sentiment shift arrives just as the precious metal bounces 3.5 percent over two days from the key support zone between $3,900 and $4,000. The last time the survey showed this exact reading, gold rallied significantly.

The sentiment reset follows a brutal repricing that pushed gold about 26 percent below its record highs. Meanwhile, institutional cash levels dropped to 3.6 percent, triggering a contrarian sell signal for broader risk assets while leaving gold uncrowded and overlooked by the wider market.

Technically, gold gained 1.74 percent to trade near $4,148 after successfully defending the $3,900 support area. The daily relative strength index is recovering back into neutral territory at 52. Traders are now watching the descending trendline resistance and upcoming Federal Reserve decisions to see if the recent bounce can turn into a lasting trend reversal.