Gold consolidates in a range below $1785 level

Gold was seen oscillating in a range below the $1785 level and remains well within the striking distance of multi-year tops set last Wednesday.

A combination of diverging forces failed to assist the commodity to build on its gains recorded over the past two trading sessions, rather led to a subdued/range-bound trading action on Tuesday. Growing worries about the ever-increasing COVID-19 cases globally extended some support to the safe-haven precious metal during the Asian session.

Investors remain concerned that the second wave of coronavirus infections could trigger renewed lockdown measures to contain the spread and that the current economic recovery may prove to be short-lived. The market worries led to a modest pullback in the equity markets and drove investors back towards traditional safe-haven assets.

Meanwhile, the supporting factor, to a larger extent, was negated by a goodish pickup in the US dollar demand, which tends to undermine the dollar-denominated commodity. Monday's upbeat US ISM Non-Manufacturing PMI print indicated that the economy has already started to recover and helped ease the recent bearish pressure surrounding the greenback.

It will now be interesting to see if the yellow metal is able to attract any follow-through buying or continues with its consolidative moves. In the absence of any major market-moving economic releases, the USD price dynamics and developments surrounding the coronavirus saga will play a key role in influencing the commodity's movement on Tuesday.

Technical levels to watch