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  • Gold fades bounce off intraday low, drops for second consecutive day.
  • US dollar trims Monday’s losses despite sluggish S&P 500 Futures, Treasury yields.
  • Sino-Western tussles, virus woes and vaccine jitters worry traders ahead of the key testimony in the US.

Gold retreats to $1,735, fizzles recovery from an intraday low near $1,731 while declining for a second consecutive day ahead of Tuesday’s European session. Although recent consolidation seems directionless, the US dollar’s gains are broadly in command to tame the yellow metal.

While tracing the greenback gains, market fears of the geopolitical tussles between China and the Western friends comprising the UK, Canada, the US and Europe gain major attention. Also on the same side could be the coronavirus (COVID-19) vaccine jitters between the European Union (EU) and London, as well as the virus fears in the bloc.

It’s worth mentioning that the Fed policymakers, including Chairman Jerome Powell and Governor Bowman, have been cautious in their recent statements. However, US Treasury Secretary Janet Yellen sounds too optimistic and tries to placate the bond bears in her latest speech.

However, sluggish moves of the US 10-year Treasury yields and stock futures probe the bullion traders by the press time. That said, the US dollar index (DXY) picks up bids around 91.90, up 0.11% intraday after Monday’s notable pullback.

Moving on, market players should keep their eyes on the geopolitical headlines for intermediate moves but today’s Congressional testimony by Fed Chair Powell and Treasury Secretary Yellen will be the key to watch.

Technical analysis

Failures to provide a decisive break above the 11-week-old resistance line, at $1,740 now, recall gold sellers but a daily closing beneath the 10-day EMA, currently around $1,733, becomes necessary for further downside. Meanwhile, 21-day EMA near $1,745 adds to the upside filters.