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 Gold prices held steady on Tuesday, after moving in a tight range in holiday-thinned trading, as market participants awaited further direction from Capitol Hill testimony by U.S. Federal Reserve Chair Jerome Powell this week.

Spot gold held its ground at $1,949.59 per ounce by 0248 GMT, while U.S. gold futures fell 0.5% to $1,961.20.

"Gold prices seem exhausted lately, as intermittent bounces over the past month have failed to find much follow-through ... This comes on the back of firmer Treasury yields, which have kept a lid on the non-yielding yellow metal's upside," IG market analyst Yeap Jun Rong said. [US/]

Investors are now focusing on Powell's congressional testimony on Wednesday and Thursday for further guidance on interest rates following the Fed's hawkish pause on monetary policy tightening last week.

Although gold is considered a hedge against inflation, interest rate hikes raise the opportunity cost of holding non-yielding bullion.

"With expectations previously pricing for a more dovish outcome from the Fed, the recent push back by the central bank has been disappointing to some, which translates to some offloading in place," IG's Jun Rong added.

The U.S. dollar, meanwhile, rose broadly on Tuesday and notched a seven-month high against the yen, while the yuan slipped after China cut two benchmark lending interest rates for the first time in 10 months. [USD/]

Additionally, the European Central Bank should raise interest rates again in July as inflation risks are skewed towards higher outcomes, Slovakia's central bank chief said on Monday, while the Bank of England is expected to raise rates by another 25 basis points on Thursday.

Among other precious metals, spot silver eased 0.1% to $23.911 per ounce and palladium fell 1.2% to $1,390.15.

Platinum was down 0.5% at $970.72, set for a third consecutive session of losses.