The overall bullish trend remains intact in the markets as investors continue to price in economic recovery
Gold prices briefly rose to one-week highs around $1,815 earlier in the day on Tuesday. However, the XAUUSD pair failed to preserve gains amid a combination of factors. The yellow metal was last seen at $1,807, marginally lower for the day.
Earlier today, the dollar came under broad-based selling pressure and registered fresh long-term lows as a result. However, the greenback erased early losses to turn positive during the European hours. Against this backdrop, the bullion had to give up modest gains while remaining fragile following the recent dip to June 2020 lows in the $1,760 zone.
Besides, the underlying bullish tone in the global financial markets continues to cap gains in the safe-haven commodity. In Europe, risk sentiment has deteriorated somehow. Still, the overall bullish trend remains intact in the markets as investors continue to price in economic recovery from the pandemic and fresh stimulus measures along with rising commodity prices.
Another factor that capped gains for the non-yielding yellow metal was rising yields in US Treasuries amid the prospects for a massive US fiscal spending plan.
At the same time, the downside potential remains limited for the time being as investors keep a cautious tone ahead of the Fed Chair Jerome Powell’s testimony later today. If Powell reassures an ultra-accommodative policy stance, it could give some support to gold prices through a weaker dollar.
From the technical point of view, the precious metal now needs to overcome the 20-daily moving average that arrives just below the $1,820 handle. This area represents the immediate key barrier for gold bulls at the moment. On the downside, significant support arrives at the $1,800 figure. As long as the prices stay above this level. Bearish risks remain limited. As the daily RSI looks directionless in the neutral territory, it looks like the metal could spend some time in the $1,810 area before deciding on the further direction.