Yesterday, gold continued its bounce for the second consecutive day, rising to approximately $4,110 per ounce. The reason for the reversal is monetary. Less hawkish comments from Federal Reserve Chairman Kevin Warsh in Sintra than the market feared have eased expectations for a rate hike this year, providing relief for the non-yielding metal.

What was key for gold is that Warsh, despite his hawkish reputation, did not give the market a reason to price in a July hike. He confirmed his determination to return inflation to the 2 percent target and promised to ensure price stability, but his remarks about declining inflation expectations and price risks over the past weeks suggested that the central bank is not in a hurry to tighten policy. This is a crucial point for gold. The metal has historically moved inversely with rate expectations, and any easing of hawkish pressure automatically restores its appeal.

However, the bounce appears fragile, and the market remains cautious. It is clear that the market still struggles to accurately interpret Warsh's position and reacts to any fresh statements. This uncertainty hinders gold from transitioning into a confident upward trend.

The overall picture of the U.S. economy also remains ambiguous, strengthening the wait-and-see approach. Manufacturing activity grew for the sixth month in a row in June, but at a slower pace. Job creation in the private sector remained steady, completing the best three-month hiring period in over a year. This data more strongly affirms the economy's resilience, which would usually work against gold; however, the soft interpretation of Warsh's words currently outweighs it. Silver rose by 1 percent to $59.74, and platinum and palladium are also up.

Today, all market attention is on the U.S. employment report, which will be released on Thursday and will be crucial for the trajectory of gold. The logic is simple and symmetrical. If the data confirms the strength of the labor market, expectations for a September rate hike will strengthen, the dollar will gain support, and gold risks losing its current bounce and returning to decline toward $4,000. If employment disappoints, arguments for a pause will strengthen, and the metal may continue to rise.

As for the current technical picture of gold, buyers need to reclaim the nearest resistance at $4,062. This will allow them to target $4,124, above which it will be quite challenging to break through. The furthest target will be around $4,186. In the event of a decline in gold, bears will attempt to take control of $4,008. If successful, a breakout of this range will deal a serious blow to the bulls' positions and push gold down to a low of $3,954 with the prospect of reaching $3,906.