BofA Sees a Difficult Second Half Taking Shape for Gold

18 Jul 2026, 11:37 · The Fresno Bee

Gold's 2026 story was mostly supposed to be how high the safe-haven trade could potentially run.

For context, the shiny yellow metal soared roughly 63% in 2025, according to LBMA benchmark data, the strongest annual gain in more than four decades.

Lately, though, the bull case has been tested, and then some

Yahoo Finance's quotes show August gold futures trading around $3,975.40 per ounce, down 10.6% over the past month and 7.5% since the start of the year.

Though the long-term bull case remains in place, the near-term setup has become much less comfortable.

In a note shared with me, BofA sees a market that's caught between strong structural support and increasingly fragile technical signals.

Positioning remains crowded, key moving averages have weakened, and the latest rebound hasn't settled where buyers are truly back in control. At the same time, gold is still holding at levels that preserve the broader uptrend.

Gold prices face renewed uncertainty as BofA sees a longer correction ahead

KRISTIANTO PURNOMO / AFP via Getty Images

Gold's long-term bull market is intact, but 2026 may be a lost year

Bank of America analysts believe that the breathtaking rally into January 2026 was so stretched that the subsequent correction will take longer and may entail further downside before a durable bottom forms.

More Bank of America:

Essentially, the bank's analysts point to a conflict between gold's long-term fundamentals and its near-term technical condition. Though the safe-haven metal remains in a secular uptrend, the charts resemble the aftermath of prior speculative peaks.

For perspective, the tremendous rally from October 2023 to January 2026 lasted 121 weeks, while the correction lasted just 24 weeks.

The imbalance makes it premature for the analysts to say that the selloff finished simply because bullion has stabilized near $4,000.

Consequently, BofA believes gold might spend the bulk of the second half of 2026 consolidating, bouncing, and potentially falling again before potentially picking up the pace in 2027 or 2028.

Several warning signals suggest the bottom is not secure

BofA analysts further argue that after falling almost 30% from its January peak, it reached its major Fibonacci retracement near $4,149 and attracted buyers around $4,000.

For perspective, Fibonacci retracements are technical levels derived from common ratios, including 38.2%, 50%, and 61.8%, that are used to estimate where an asset could find support following a momentous rally.

However, BofA argues that markets don't correct through price alone, as they can also move sideways for months while momentum, positioning, and investor expectations normalize.

What's crucial to consider is the time imbalance.

Considering gold's rally lasted 121 weeks, and the correction was just 24 weeks old, a pullback lasting roughly 38.2% of the previous move higher would extend to nearly 46 weeks. That points to the bullion remaining mostly unsettled into late 2026.

That said, BofA's technical roadmap paints a relatively volatile path ahead instead of a clean rebound:

A rally may come first: Gold could rebound toward $4,325 to $4,500, but a move above $4,300 might not end the correction, forming a potential lower high instead before selling resumes.
Key downside levels remain: BofA sees potential support around the 50% Fibonacci retracement at $3,703, with another long-term technical measure pointing to roughly $3,605.
Momentum still looks fragile: Gold triggered a death cross on June 26, which basically means that its 50-day moving average dropped behind its 200-day average, signalling weaker momentum. Historically, gold was lower 70% of the time, 40 trading days after comparable signals.
One bullish counter-signal remains: Gold's RSI, measuring the speed and strength of price moves, reached an extremely overbought 90. However, a TD Sequential "red 13", used to flag possible trend exhaustion, suggests selling pressure may be fading while gold holds above $3,827.

Sources: Investopedia, Scribd.

BofA's strategy is to buy gradually at lower levels

BofA is advising investors to avoid chasing gold near $4,000 while the correction is still developing.

The bank suggests taking a small position below $4,000, adding more around $3,700 to $3,600, while building a fuller allocation in the $3,450 to $3,250 range.

That approach underscores BofA's broader view that the risk-reward improves meaningfully at lower prices.

Moreover, the bank also prefers gold itself over silver and gold-mining ETFs such as GDX and GDXJ.

Physical gold offers direct exposure to bullion prices, while miners are up against a myriad of added risks linked to costs, operations and stock-market volatility.

Within the mining space, BofA feels larger producers are far better positioned than junior miners. Newmont (NEM) is singled out as perhaps the strongest relative option among major miners, with the stock holding up a lot better than the broader GDX ETF.

Nevertheless, Newmont remains in a correction, with possible downside toward $86 to $82 unless a durable bottom forms.

Over the past month, the stock has shed 17% of its value and over 9.5% year-to-date, according to data from Seeking Alpha.

However, after the sell-off, the stock is now trading attractively, at around 9.5-times forward earnings (non-GAAP).

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This story was originally published July 18, 2026 at 4:37 AM.