Gold Price Rebound? Futures Positioning Signals Support Above 4,000

Gold prices are on track for a fourth consecutive monthly decline, yet several indicators suggest bearish momentum may be fading. Extreme seasonality readings, improving futures positioning and resilient options market sentiment all point to the potential for another rebound while support above 4,000 remains intact.

 

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Gold Holds Above 4,000 as Positioning and Technical Signals Improve

Gold Bulls To Eye Another Rebound?

On June 11, I outlined the case for a bullish mean-reversion move in gold. At the time, I noted that gold prices had fallen more than 10% in June, far exceeding the average decline of -3.5% seen during bearish Junes since 2000. And that was before the month had reached its halfway point. With the 4,000 milestone providing nearby support, the odds appeared to favour a rebound. I'm pleased to say the low was identified to the day, and a similar setup now appears to be emerging.

Gold remains on track for a fourth consecutive monthly decline — its longest bearish streak since September 2022. Yet it is once again lower by more than 10% for the month, putting it on course for its second-worst monthly performance of the century. At the same time, monthly volatility continues to trend lower despite elevated price swings, which could be interpreted as a crude sign that conditions are becoming more stable.

Source: COMES, TradingView, LSEG

 

 

Gold's June Decline Stretches Historical Extremes

Seasonality shows June is typically a bearish month for gold, delivering a negative average and median return alongside a relatively low win rate. Since 2000, gold has declined in 60% of Junes, with those bearish months posting an average return of -3.5%. Therefore, the fact that gold is already down more than 10% this month while continuing to hold above support suggests it may be able to claw back at least some of those losses before month-end.

 

 

 

Gold Futures (GC) Market Positioning | COT Report

Gold Shorts Collapse as Positioning Improves

It should also be noted that bearish bets against gold have collapsed on the CME futures market. Gross shorts among managed funds have fallen to their lowest level since 2022, while large speculators hold their fewest short positions since January 2025. Although gross longs remain low by historical standards, they have been gradually increasing, helping to lift net-long exposure among both groups.

Open interest has also trended lower in recent months, suggesting the decline in gold prices was not primarily driven by aggressive new short selling. Instead, the move appears to have been characterised by both long and short positions being unwound. However, total open interest has edged higher over the past couple of weeks, hinting at potential accumulation as gold continues to hold above the 4,000 level.

 

For traders wanting a deeper understanding of futures positioning, I’ve also published a guide on how to read and interpret weekly COT data in forex markets.

 

 

Options Markets Hint at Underlying Resilience

Furthermore, risk reversals remain above their recent lows and trade at higher levels relative to those lows compared with prices. This could be deemed a positive divergence between options traders and spot gold prices. Ultimately, demand for puts relative to calls is nowhere near as strong as it was a few weeks ago. Which again, provides a clue that gold may not be ready to break below 4,000.

Source: CFTC (COT), COMEX, LSEG

 

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Gold Futures (GC) Technical Analysis

The daily chart shows prices have pulled back from the rebound towards 4,400, although downside momentum appears to be fading and the daily RSI (2) is oversold. If gold can hold above the October low into today's close, it would confirm a higher low and provide a bullish signal for the near term. While the US dollar continues to rally, it is also approaching key resistance levels of its own, raising the possibility that gold could establish a trough above 4,000.

The 1-hour chart shows prices attempting to hold above the daily VPOC (volume point of control). Bulls may want to wait for stronger evidence that a swing low has formed, but while gold remains above 4,000, the potential remains for a rebound towards 4,200, 4,300, or even the 4,400 high. Such a move could unfold while the broader bearish trend on the daily chart remains intact.

Source: COMEX, TradingView