Today, the gold price has risen slightly amid signs that buyers who purchased on the dip have become active, following the escalation of hostilities in the Middle East that led to a 2% price drop on Monday.

Gold prices rose by 0.6%, nearing the mark of $4550 per ounce. US military officials stated that they repelled Iranian attacks, ensuring the passage of two American-flagged vessels through the Strait of Hormuz. However, tensions heightened again after the UAE reported intercepting cruise missiles launched by the Islamic Republic and accused an Iranian drone of causing a large fire at its Fujairah port.

Against this backdrop, gold prices sharply declined as all this fuels expectations of a new round of interest rate hikes by central banks around the world in the near future. Expectations for rising interest rates typically pressure gold prices.

Yesterday's attacks undermined the ceasefire, which had largely been observed since it took effect on April 8, increasing the risk of inflation and interest rate hikes. Oil prices surged sharply amid these reports, and the yield on 30-year Treasury bonds rose to its highest level since July, as traders raised bets that the Federal Reserve would need to increase borrowing costs to curb inflation.

Traders expect that the US Treasury's announcement regarding borrowing plans for the next three months, along with a busy calendar of economic reports, will provide additional hints on the dynamics of interest rates this week.

Clearly, another round of escalation in the Middle East may trigger another wave of sell-offs in precious metals, so caution is advised even for purchases at current levels.

Regarding the current technical picture of gold, buyers need to reclaim the nearest resistance at $4546. This will allow them to target $4607, above which it will be quite challenging to break through. The farthest target will be around $4656. In the event of a decline in gold prices, bears will attempt to take control of $4481. If successful, breaking this range will deal a serious blow to the bulls' positions and push gold down to a low of $4432, with the prospect of a further decline to $4372.