Observed holding chromium mask (6)
I believe the answer is:
screen
'mask' is the definition.
(thesaurus)
'observed holding chromium' is the wordplay.
'observed' becomes 'seen' ('seen' can be a synonym of 'observed').
'holding' means one lot of letters goes inside another.
'chromium' becomes 'cr' (chemical symbol).
'seen' going around 'cr' is 'SCREEN'.
(Other definitions for screen that I've seen before include "Upright partition" , "Light partition providing shelter, concealment etc" , "cloak" , "Protect - project" , "A film is projected onto it" .)