Gold Price Forecast: XAU/USD holds steady below $1,850 level, awaits Powell’s testimony

• Gold price remains on the defensive on Tuesday, though lacks any follow-through selling.

• Retreating US bond yields keeps the US Dollar bulls on the defensive and lends support.

• Traders also seem reluctant ahead of Federal Reserve Chair Jerome Powell’s testimony.

Gold price struggles to capitalize on its modest intraday gains beyond the $1,850 area on Tuesday and remains well below a nearly three-week high touched the previous day. The XAU/USD languishes below the $1,845 level through the first half of the European session as traders await a testimony by Federal Reserve (Fed) Chair Jerome Powell before placing fresh directional bets. Jerome Powell’s testimony eyed for clues about future rate-hike path Powell's remarks will be closely scrutinized for clues about the Fed's future rate-hike path, which, in turn, will play a key role in influencing the near-term trajectory of the non-yielding Gold price. Several policymakers recently backed the case for higher rate hikes and opened the door for a 50 bps lift-off at the upcoming Federal Open Market Committee (FOMC) meeting later this month. Moreover, the incoming macro data from the United States (US) indicated that inflation isn't coming down quite as fast as hoped and pointed to an economy that remains resilient despite rising borrowing costs. Hence, a more hawkish commentary will offset any near-term positive outlook for the XAU/USD and shift the bias back in favour of bearish traders.