Gold holds steady on softer USD, Powell's testimony in focus

   •  Remains supported by a weaker USD.
   •  Risk-on mood dents safe-haven demand.
   •  Powell’s testimony eyed for fresh impetus.

Gold held with modest gains for the second consecutive session on Tuesday, albeit lacked any strong follow-through traction amid subdued trading action. 

A weaker US Dollar was seen as one of the key factors lending some support to dollar-denominated commodities - like gold. The positive factor, to some extent, was negated by positive opening across European bourses, which tends to weigh on the precious metal's safe-haven appeal. 

Meanwhile, investors' reluctance to place aggressive bets ahead of the Fed Chair Jerome Powell's first congressional testimony also seems to have collaborated to the range-bound price-action through the early European session. 

Powell's comments would influence investors' expectations over the Fed monetary policy tightening cycle and should eventually provide a fresh directional impetus for the non-yielding yellow metal. 

However, prospects of rising consumer prices in the US might continue to underpin demand as a hedge against inflationary pressure and could limit any deeper corrective slide in the near-term. 

Technical levels to watch

Immediate resistance is pegged near $1340 level, above which the metal seems to head towards challenging $1348 supply zone en-route $1353-54 resistance zone. On the flip side, $1328 level might continue to act as an immediate support, which if broken could accelerate the fall back towards $1320 strong horizontal support.