Gold’s Sentiment Flip: Fund Managers See Value Again as Geopolitical Fears Trump Rate Worries
Published on 07/23/2026 at 06:51 | Redaktion boerse-global.de
Gold has clawed its way back above $4,100, but the real story lies in a dramatic shift in institutional sentiment. For the first time since March 2023, professional money managers consider the precious metal undervalued, according to Bank of America’s latest survey of 181 fund managers who collectively oversee roughly $484 billion.
A net five percent of respondents now view gold as cheap — the most bullish reading in over three years. That marks a sharp reversal from the start of 2025, when most professionals believed prices were too high. The change of heart follows a brutal correction that saw bullion tumble roughly 26 percent from its late January record high of $5,626.80.
The recovery gathered pace on Wednesday, with the spot price closing at $4,159.80 per troy ounce, up 1.91 percent on the day and 4.51 percent higher on the week. The move came as the metal reclaimed the psychologically important $4,100 threshold, a level it had struggled to hold in recent weeks.
Iran Conflict Overwhelms Normal Market Mechanics
The primary catalyst for the rebound is escalating military action in the Middle East. US forces launched strikes against Iranian military targets for the eleventh consecutive night, deepening fears of a broader regional conflict. Iran’s Foreign Minister Abbas Araghchi warned of retaliation should further attacks on infrastructure occur, while Yemen’s Houthi rebels have threatened oil tankers in the Red Sea.
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Gold’s resilience is all the more notable given the headwinds it faces. Brent crude has surged past $93 a barrel, and ten-year US Treasury yields now sit above 4.6 percent. In normal circumstances, rising energy prices fuel inflation expectations, which in turn push bond yields higher and increase the opportunity cost of holding non-yielding gold. Yet the overriding geopolitical risk has temporarily broken that correlation, with haven demand proving stronger than rate sensitivity.
Gold exchange-traded funds have recorded inflows in recent days, adding further support. The next upside targets sit at $4,200 and the 50-day moving average near $4,266 — roughly 2.5 percent above current levels — which analysts describe as a realistic short-term objective.
Wall Street’s Rate Caution Caps the Rally
Despite the bullish sentiment shift, the path higher is far from clear. Two of Wall Street’s largest investment banks have trimmed their price forecasts, pointing to the Federal Reserve’s reluctance to ease monetary policy.
Goldman Sachs cut its year-end target from $5,400 to $4,900 on June 19, citing delayed rate-cut expectations. J.P. Morgan followed in early July, slashing its fourth-quarter forecast by roughly a quarter to $4,500 from $6,000. For the third quarter, the bank expects an average of $4,300, blaming weaker physical demand and the metal’s heightened sensitivity to interest rates.
The market is now pricing in a growing chance that the Fed could raise rates rather than cut them, as energy-driven inflation concerns mount. The central bank’s next policy decision is in focus, with some analysts expecting rates to remain on hold through year-end, while others see a risk of tightening.
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Chart Levels and Ceasefire Hopes in Play
Technically, gold is fighting to establish a foothold above $4,100. If it holds, the path opens toward $4,200 and beyond. Should selling pressure return, the $4,000 zone — recently tested before the current bounce — remains the critical floor. A break below that level would risk a retest of the year’s lows.
On the diplomatic front, a ten-day ceasefire proposal brokered by Qatar, Egypt, and Pakistan is on the table. If progress materializes, the geopolitical risk premium could unwind quickly, removing a key pillar of support. For now, however, the conflict remains the dominant driver.
The metal finds itself caught between two opposing forces: the strongest institutional conviction in three years that gold is undervalued, and a Wall Street consensus that higher-for-longer rates will cap any sustained rally. The next few weeks will determine which force wins out.
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