Gold flirting with daily lows, below $1570 level

• Gold comes under some selling pressure amid the prevailing risk-on mood.
• Rebounding US bond yields, stronger USD adds to the intraday selling bias.
• The downside seems limited ahead of the Fed Chair Powell’s testimony.

Gold edged lower through the early European session on Tuesday and refreshed daily lows, around the $1566-65 region in the last hour.

Following the previous session's two-day/directionless trading action, the precious metal came under some selling pressure on Tuesday and was being weighed down by fading safe-haven demand.

Gold weighed down by risk-on mood

Despite concerns over the economic impact of the deadly coronavirus, expectations for a new round of economic stimulus measures by China provided a modest boost to the global risk sentiment.

The risk-on mood was further reinforced by a goodish pickup in the US Treasury bond yields, which further collaborated towards driving flows away from the non-yielding yellow metal on Tuesday.

The dollar-denominated commodity was further pressurized by sustained buying around the US dollar, albeit the downside is likely to remain limited ahead of the Fed Chair Jerome Powell's testimony.

Hence, it will be prudent to wait for some strong follow-through selling before confirming that the recent bounce might have already run out of the steam and positioning for any further depreciating move.

Technical levels to watch