Gold Price Analysis: XAU/USD struggles for direction, stuck in a range above $1800 mark

Gold continued with its struggle for a firm intraday direction and remained confined in a range below the $1810 level through the mid-European session.

The US dollar witnessed some fresh selling in reaction to Tuesday's dovish sounding comments by Fed Chair Jerome Powell. This, in turn, was seen as a key factor that assisted the dollar-denominated commodity to build on the previous day's bounce from sub-$1800 levels.

However, a combination of factors kept a lid on any further gains for the XAU/USD. Investors remained optimistic about the global economic outlook amid the rollout of COVID-19 vaccines and the progress on US President Joe Biden's proposed $1.9 trillion stimulus package.

This was evident from the underlying bullish tone in the financial markets, which held bulls from placing aggressive bets around the safe-haven commodity. Apart from this, a modest pickup in the US Treasury bond yields further collaborated to cap the non-yielding yellow metal.

The market has been reacting strongly to the prospects for a massive US fiscal spending plan and pushed the yield on the benchmark 10-year US government bond back closer to over one-year tops. Hence, any meaningful positive move might be seen as an opportunity for bearish traders.

Market participants now look forward to Powell's second day of testimony before the House Financial Services Committee, which might influence the US bond yields and the USD. This, along with the broader market risk sentiment, might produce some trading opportunities around the XAU/USD.

Technical levels to watch