For the first time since August 2009, gold is 'undervalued'

By Myles Udland

Finally, gold is cheap.

In its latest fund manager survey, Bank of America Merrill Lynch noted that on a valuation basis, gold was viewed as "undervalued" by fund managers for the first time since August 2009.

By BAML's measure, the precious metal is 1 per cent undervalued.

Of course, it's been a long road down for gold, which is now almost 40 per cent lower than its all-time high hit back in 2011.

In a note to clients on Monday, Rick Bensignor, chief market strategist at R.F. Lafferty, said that $1,150 - with a small margin either way - is a big price level for gold.


At $1,159, gold hits a 61.8 per cent Fibonacci retracement from its all-time high, a key technical support level.

Bensignor adds that at around current prices, almost every buyer since 2009 is holding a losing position, and in his view, it's either time for a further drop or a bounce higher: the current price won't be sustained.

On Tuesday morning, gold prices were unchanged at around $1,155 an ounce.

And by at least one measure, people think gold is a buy.