Gold Price Analysis: XAU/USD surrenders a major part of intraday gains, up little around $1840

• Renewed USD selling bias assisted gold to gain traction for the second consecutive day.
• The upbeat market mood, rallying US bond yields capped any further gains for the metal.
• Investors now eye Yellen’s confirmation hearing for some short-term trading opportunities.

Gold maintained its bid tone through the mid-European session, albeit seemed struggling to capitalize on the intraday positive move. The commodity was last seen trading around the $1840 region, well within the striking distance of session lows.

The precious metal built on the previous day's goodish recovery move from the vicinity of the $1800 mark and gained traction for the second consecutive session on Tuesday. The uptick was exclusively sponsored by the emergence of some selling around the US dollar, which tends to underpin demand for the dollar-denominated commodity.

The USD's pullback from near one-month tops could be solely attributed to some profit-taking ahead US Treasury Secretary nominee Janet Yellen's confirmation hearing later this Tuesday. Reports indicated that Yellen will urge lawmakers to act big to a protracted downturn and also outline the need for the proposed $1.9 trillion COVID-19 relief package.

Meanwhile, the market has been pricing in the prospects for more aggressive US fiscal spending in 2021 under Joe Biden's presidency. Expectations of a larger government borrowing were evident from the recent strong rally in the US Treasury bond yields. This, in turn, was seen as a key factor keeping a lid on strong gains for the non-yielding yellow metal.

Apart from hopes for additional US stimulus measures, the optimism over the rollout of vaccines for the highly contagious coronavirus disease continued boosting investors' confidence. This was evident from the underlying bullish sentiment in the equity markets, which further weighed on the safe-haven XAU/USD and capped the upside, at least for now.

In the absence of any major market-moving economic releases from the US, the precious metal remains at the mercy of the USD price dynamics and the broader market risk sentiment. This, along with the US bond yields and developments surrounding the coronavirus saga, might assist traders to grab some short-term opportunities on Tuesday.

Technical levels to watch