Gold Price Analysis: XAU/USD struggles near session lows, around $1850 region

Gold maintained its offered tone through the first half of the European session and was last seen trading near the lower end of its daily range, around the $1850 region.

The precious metal witnessed some selling on Tuesday and retreated further from the $1875-76 resistance zone touched in the previous session. The downfall was exclusively sponsored by the prevalent upbeat market mood, which tends to undermine demand for traditional safe-haven assets, including gold.

The global risk sentiment got a strong lift amid renewed optimism over a massive US fiscal stimulus and hopes for a stronger global economic recovery. Democrat lawmakers on Monday filed the $1.9 trillion budget measure – a step toward bypassing Republicans and getting the legislation passed in the US Congress.

Meanwhile, the risk-on flows, along with expectations of a larger government borrowing triggered a fresh leg up in the US Treasury bond yields. This was seen as another factor exerting pressure on the non-yielding yellow metal. However, fresh selling around the US dollar extended some support to the dollar-denominated commodity.

From a technical perspective, the XAU/USD, so far, has managed to defend a short-term ascending trend-line support. The mentioned trend-line extends from January monthly swing lows, around the $1800 level, which if broken decisively will set the stage for a further near-term depreciating move for the commodity.

There isn't any major market-moving economic data due for release on Tuesday. Hence, the broader market risk sentiment will play a key role in influencing the safe-haven XAU/USD. Apart from this, the US bond yields and the USD price dynamics will also be looked upon to grab some short-term trading opportunities.

Technical levels to watch