Think about it...

- Cross dressing for the Don
- Going out of his way to be sexy for the Don
- Dating Barret
- Being oblivious to Tifa, Aeris and Yuffie's charms at every turn
- Bathing and lounging with Mukki
- Large phallic sword
- Obsession with femboy Sephiroth
- All those balls of materia
- That hair
- He can "Mistify" male enemies
- Stood there and allowed aforementioned femboy to murder his beard, Aeris
- Got naked and then showed off in front of Shinra infantry
- Obsessed with large phallic Sister Ray
- Clearly a closet case with all those other selves in the disc 2 dream sequence
- Buys flowers from Aeris even though he has no girl to give them to
- Doesn't say he isn't gay, just that the Don's goons are SCRUBS and therefore not his type
- That rainbow when he summons Phoenix

Just try and deny these infallible articles of proof.