Key Takeaways:
Gold has recovered more than 7% from its June low after Credit Agricole said the sell-off created a buying opportunity.
Gold traded near $4,340 an ounce on Monday, up from a June low of $4,028, as Credit Agricole said the recent sell-off was overdone.
"The pullback in gold was excessive relative to the fundamental backdrop, and we see the current level as an attractive entry point for long-term investors," the bank's commodities research team said in a note dated June 14.
The metal has recovered from a six-month low reached earlier this month, though it remains well below January's record high. The rebound accelerated after reports that the US and Iran reached a preliminary understanding to end the conflict, removing the US naval blockade on Iran and restoring traffic through the Strait of Hormuz, according to India TV News. Silver also rallied, with July delivery contracts on the Multi Commodity Exchange climbing Rs 6,066, or 2.46%, to Rs 252,252 per kilogram.
A sustained recovery above $4,400 would signal the bull market remains intact, analysts said. The next catalyst is the US personal consumption expenditures data due June 26, which will shape expectations for Federal Reserve rate policy and determine whether gold can extend its rebound.
The decline to around $4,028 in early June marked gold's lowest level since December 2025. The sell-off was driven by a stronger US dollar and expectations that the Federal Reserve would keep interest rates higher for longer, reducing the appeal of non-yielding assets. COMEX gold net long positions fell to a six-month low in the week ended June 9, according to CFTC data.
Credit Agricole's bullish call contrasts with the bearish positioning that had built up during the sell-off. The bank argues that physical demand remains strong, with central bank purchases running at elevated levels and Chinese retail buying providing a floor under prices. Gold at current levels trades roughly 15% below its all-time high, a discount that historically has attracted value-oriented buyers.
Geopolitical Shift Adds Tailwind
The geopolitical backdrop has shifted in gold's favor. Reports that the US and Iran reached a preliminary understanding to end the conflict and restore traffic through the Strait of Hormuz reduced safe-haven demand for the dollar while boosting commodities broadly. Gold, which benefits from a weaker dollar and lower real yields, has been a direct beneficiary of the shift.
This article is for informational purposes only and does not constitute investment advice.
