Gold consolidates in a range, around $1770 region

Gold extended its sideways consolidative price moves and remained confined in a narrow trading band, just below the $1775 level.

A combination of diverging forces failed to provide any meaningful impetus to the commodity and led to a subdued/range-bound trading action for the second consecutive session on Tuesday. Concerns about rising coronavirus cases globally and fading hopes of a sharp V-shaped global economic recovery continued benefitting the precious metal's safe-haven status.

Gold was further supported by worries over a further escalation in diplomatic tensions between the US and China, especially after the later passed national security laws for Hong Kong and Macau. Meanwhile, the US limited the export of sensitive American technology to Hong Kong and effectively suspended the preferential treatment regulations for the former British colony.

Despite the supporting factor, the upside remained capped amid a modest pickup in the US dollar demand, which tends to undermine demand for the dollar-denominated commodity. This coupled with signs of stability in the global equity markets failed to impress bullish traders or assist the commodity to build on its recent positive move to eight-year tops.

Looking at the technical picture, the commodity has been oscillating well within a broader trading range over the past week or so. This further makes it prudent to wait for a sustained move in either direction before traders start positioning for the metal's next leg of a directional move.

Moving ahead, market participants now look forward to the US economic docket – featuring the release of Chicago PMI and the Conference Board's Consumer Confidence Index. This will be followed by the Fed Chair Jerome Powell's testimony before the House Financial Services Committee, which might influence the non-yielding yellow metal and produce some short-term trading opportunities.

Technical levels to watch