• Gold struggled to gain any meaningful traction and remained confined in a range below 200-DMA.
• Broad-based USD weakness offered support to the metal and helped limit any meaningful downfall.
• The risk-on impulse, rising US bond yields continued acting as a headwind and capped the upside.

Gold reversed an intraday dip to the $1,830 area, or a three-day low, though struggled to capitalize on the attempted recovery and remained below the very important 200-day SMA. Having seesawed between tepid gains/minor losses, the XAUUSD now seems to have stabilized in neutral territory and was seen trading below the $1,840 level during the early North American session.

Signs that there will not be any consensus for a 100 bps Fed rate hike move in the foreseeable future prompted fresh selling around the US dollar on Tuesday. This, in turn, was seen as a key factor that extended some support to the dollar-denominated commodity. That said, a combination of factors held back traders from placing aggressive bullish bets around gold.

The risk-on impulse - as depicted by the strong rally in the global equity markets - kept a lid on any meaningful upside for the safe-haven XAUUSD. Apart from this, expectations that the Fed would retain its aggressive policy tightening stance, pushed the US Treasury bond yields higher. This further acted as a headwind for the non-yielding gold.

The two-way/directionless price move witnessed since Monday points to indecision among traders over the next leg of a directional move for the XAUUSD. That said, the recent breakdown through a multi-week-old trading range and acceptance below a technically significant moving average (200-DMA) favours bearish traders and supports prospects for further losses.

Hence, any meaningful upside could be seen as a selling opportunity and runs the risk of fizzling out rather quickly. Traders, however, might refrain from placing aggressive bets ahead of Fed Chair Jerome Powell's testimony on Wednesday and Thursday. In the meantime, the broader risk sentiment, the US bond yields and the USD price dynamics might provide some impetus to gold.

Technical levels to watch