Gold fell 0.7 percent yesterday to $4,377.49 an ounce, having earlier in the session risen 0.9 percent to reach a 10-week high. Silver declined 0.7 percent to $64.88, and platinum and palladium also fell.

Despite the pullback, gold is currently in demand. If upcoming U.S. data continue to point to slowing growth and contained inflation, which would temper expectations of Federal Reserve rate hikes, gold could potentially continue to rise. However, some volatility is inevitable—especially if yields or the dollar recover.

The technical picture has also improved. This week's rise allowed the metal to overcome the 100-day moving average for the first time since April, which is traditionally seen as a significant signal of a change in the medium-term trend. In recent weeks, gold has held firmly above the $4,000 support threshold, supported by renewed investor interest underpinned by increased central bank purchases, particularly from China.

Several events lie ahead that could set the direction for the coming months. Ahead of the next Fed meeting next month, additional employment and inflation reports are expected. Separately, traders will closely watch Chairman Kevin Warsh's speech at the annual Jackson Hole symposium at the end of August, where the new head of the central bank will speak in this capacity for the first time and may outline his views on the future policy trajectory.

The main risk to the current recovery remains geopolitics. Despite weaker July inflation readings, any escalation in the Middle East threatens a return to high energy prices, which have supported inflationary risks since the start of the war. Oil is moving toward a weekly gain after months of volatile trading as traders watch intermittent attempts by the U.S. and Iran to halt the conflict and restore traffic through the Strait of Hormuz.

As for the current technical picture for gold, buyers need to take the nearest resistance at $4,432. This would allow a target of $4,481, above which a breakout will be rather difficult. The most distant target is the $4,546 area. In the event of a decline, bears will try to take control of $4,372. If they succeed, a break of the range would deliver a serious blow to bulls and push gold down to a low of $4,304, with a prospect of moving to $4,249.