Gold continues to decline today, trading around $4,119 per ounce, having completely lost its recent gains. The rationale is familiar: inflationary concerns outweigh the geopolitical relief from the Iranian agreement, while a hawkish Federal Reserve remains the main drag on the non-yielding metal.

The fresh impetus for pressure came from Chicago Fed President Austin Goolsbee. On Monday, he directly expressed his concerns about inflation and questioned whether all the factors driving price increases are temporary. "We are dealing with an inflation problem that significantly exceeds the target level and is moving in the wrong direction," he stated.

It's worth noting that this is exactly the signal that gold fears the most, as it confirms the Fed's readiness to keep rates high or raise them further. Recall that the tough rhetoric from new Chair Kevin Warsh last week already alarmed the market and neutralized the positive effect of the signed peace memorandum.

A strong dollar has added an extra burden on the metal. Since the last Fed meeting, the U.S. currency has strengthened by more than 1%, which automatically makes dollar-denominated gold more expensive for international buyers and hinders its growth.

It is telling that even the most convinced bulls are softening their forecasts. Deutsche Bank has lowered its third-quarter earnings by 4,300. Gold remains at its lowest level, falling by $500 to $4,900 last week, as it no longer expects the Fed to lower rates this year.

Since the start of the war in late February, gold has lost more than a fifth of its value, while silver has plummeted by about a third. Technically, the outlook remains weak.

This is why all eyes are now on the publication of the PCE index on Thursday. This is the Fed's preferred measure of inflation, and an acceleration is expected. If the figure comes in above expectations, hawkish rate expectations will be confirmed, and gold risks testing the lower boundary of the range at $4,000. If it falls below that level, the metal may find an opportunity for a short-term bounce.

Silver is falling more aggressively today, down 3.6% to $62.72. Platinum and palladium each lose more than 2%.

Regarding the current technical picture for gold, buyers need to reclaim the nearest resistance at $4,186. This would allow for a target of $4,249, above which it will be quite challenging to break through. The furthest target will be around $4,304. If gold declines, bears will attempt to gain control over $4,124. If they succeed, breaking through this range will significantly hit the bulls' positions and push gold down to a low of $4,062, with the prospect of reaching $4,008.