Gold has held steady for the second consecutive day, returning to the level of $4,700 per ounce after a sell-off.

Yesterday, the precious metal came under pressure following the release of US inflation data, which prompted markets to anticipate an increase in Federal Reserve interest rates. The report indicated that the US Consumer Price Index rose by 0.6% in April, marking the largest jump since 2023, while real wages for Americans fell for the first time in three years—inflation eroded the nominal income growth.

Markets reacted quickly: futures markets are now pricing in a probability of over 40% for a Federal Reserve rate hike by the end of the year, while at the end of April, this probability was close to zero. The yield on US bonds increased as investors demanded a higher premium to hold them amid sustained inflationary pressure from energy prices.

It would seem that gold should be declining: historically, rising interest rates negatively impact the metal, which does not generate interest income. However, losses have been quite moderate—and this is not a coincidence. The key factor in this behavior is demand, primarily from central banks, which continue to actively increase their reserves.

An additional blow to the market came yesterday from India, the world's second-largest consumer of gold. The country's authorities more than doubled import duties on gold and silver, raising them from 6% to approximately 15%. This move is explained by the desire to protect the rupee and replenish foreign exchange reserves. Silver has remained virtually unchanged in price, trading around $86.47 per ounce—up 17% since the beginning of May. Platinum and palladium have seen declines.

Thus, gold finds itself in a turbulent zone, influenced by several factors: the risk of a US monetary policy tightening, unexpected protectionist measures from major consumers, and instability in energy markets. Nevertheless, the metal is currently showing enviable resilience, keeping the chances of a return to a bull market alive in the near future.

Given the current technical picture, gold buyers need to reclaim the nearest resistance at $4,708. This will allow them to target $4,771, which will be quite challenging to break through. The further target will be around $4,835. In the event of a decline in gold prices, bears will attempt to take control of $4,656. If they succeed, a breakout of this range will deal a serious blow to bullish positions and push gold down to a low of $4,607, with the potential to reach $4,546.