Today, gold recovered slightly after its largest weekly drop since June. Spot gold rose about 0.6% and climbed back above $4,000 per ounce. Last week the metal lost more than 4%, while silver fell 5.4% and now trades around $53.92.

The rebound reflects improved market sentiment. Oil pulled back from six-month highs after both the US and Iran stuck to familiar rhetoric, and equities recovered from a sell-off driven by doubts about the AI sector. These events matter for gold because last week it sold off to cover equity losses, and flows out of AI names into bonds increased selling pressure. The partial reversal gave the market — and the metal — a little breathing room.

Bond markets and interest-rate expectations remain the main reference. Traders initially priced in higher odds of an October hike after hot inflation data, but Federal Reserve officials' remarks cooled that scenario. The market now prices in a less than 10% chance of a rate rise at this week's meeting, although high energy prices still support hikes later in the year. For gold — which yields no interest — expensive money remains an obstacle, so the low chance of an October hike has not provided meaningful support.

Recall that gold has fallen roughly a quarter since the US–Iran conflict flared in late February because central banks tightened policy to contain inflation. On Friday, the price hit its lowest level since July. A worrying sign was ETF outflows: preliminary data show daily redemptions exceeded 10 tonnes. Fund holdings had risen every week since mid-July and reached multi-year highs despite the price decline, so market participants are watching that trend closely.

All this suggests gold remains in consolidation and the sell-off may not yet be exhausted. Many analysts argue that gold's muted response to a softer rate backdrop signals persistent pressure, although safe-haven demand should provide a cushion once liquidations end. I believe that while oil stays expensive and the Fed gives no clear dovish signal, gold will oscillate around $4,000, and a sustained rally is only likely with a clearer easing of yield and inflation pressures.

Technical picture: buyers need to take the nearest resistance at $4,062. That would set up a target at $4,124, above which a breakout will be fairly difficult. The farther target is the $4,192 area. On the downside, bears will try to seize control of $4,008. If that succeeds, a range break would deal a serious blow to bulls and push gold down to $3,954 with the prospect of extending to $3,906.