Gold has entered a consolidation phase after a five-day rally, decreasing by 0.3% to $4644.49 per ounce and retreating from a three-month high reached the previous day. Silver, on the other hand, rose by 0.7% to $69.11, and both platinum and palladium also gained.

The nature of this rally remains fundamentally different from that of typical movements driven by rate expectations. Recent attempts to control the cost of servicing U.S. government debt have revived interest in the so-called devaluation trade, the same trade that fueled last year's record gold rally when investors flocked to the metal, avoiding sovereign debt and currencies while protecting themselves from uncontrollable budget deficits.

Technical and positional signals confirm the breadth of investor participation. The noticeable rebound in recent weeks has pushed the metal above its 200-day moving average, often seen as an important momentum indicator. However, gold has yet to consistently hold above $4656. Only sustained trading above this range will lead to further rally development.

Nevertheless, caution is warranted. While precious metals find comfort in this higher range, rising energy prices and persistent risks of interest rate hikes are serious constraints to further upward trends.

It is worth noting that Tuesday brought several factors that alleviated inflation fears while simultaneously undermining arguments for gold. Treasury yields fell by five to seven basis points across the curve, and oil continued to decline on optimism regarding de-escalation in the Middle East.

The main event of the week remains Kevin Warsh's first major speech as Federal Reserve Chair at the symposium in Jackson Hole on Friday. Investors will be looking for clues about the central bank's approach to inflation. For Warsh, this is an opportunity to respond to criticism that he has not been transparent in his views on the economy.

As for the current technical picture of gold, buyers need to take out the nearest resistance at $4656. This will allow them to target $4708, above which it will be quite challenging to break through. The most distant target will be around $4738. In the event of a decline, bears will attempt to take control of $4607. If they succeed, a breakout below this range will deal a serious blow to bull positions, pushing gold down to a low of $4546 and potentially reaching $4481.