Gold Price Forecast: XAUUSD reverses intraday dip, lacks follow-through amid stronger USD

• A softer risk tone assisted the safe-haven gold to reverse modest intraday slide.
• Rebounding US bond yields underpinned the USD and capped gains for the metal.
• Investors now look forward to this week’s key US macro data for a fresh impetus.

Gold attracted some dip-buying near the $1,846 region on Tuesday and climbed back closer to the daily peak during the early European session. The overnight optimism led by the easing of COVID-19 lockdowns in China turned out to be short-lived amid doubts if central banks can hike interest rates to curb inflation without impacting economic growth. The worries resurface following the release of official Chinese PMIs, which showed contraction in both manufacturing and services sectors during May. This, along with concerns that the global supply chain disruption would continue to push consumer prices even higher, weighed on investors' sentiment and benefitted the safe-haven precious metal.

That said, resurgent US dollar demand kept a lid on any meaningful gains for the dollar-denominated gold. A sharp spike in the US Treasury bond yields assisted the USD to make a solid comeback from over a one-month low touched the previous day and acted as a headwind for the non-yielding yellow metal. Traders also seemed reluctant to place aggressive bets ahead of important US macro data, including the closely watched monthly jobs report (NFP), scheduled at the beginning of a new month. This makes it prudent to wait for strong follow-through selling before positioning for an extension of the recent bounce from a multi-month low, around the $1,787-$1,786 region touched on May 16.

This week's rather busy US economic docket kicks off with the release of the Conference Board's Consumer Confidence Index. This, along with the US bond yields, will influence the USD price dynamics and provide some impetus to gold prices. Apart from this, traders will take cues from the broader market risk sentiment to grab short-term opportunities around the XAUUSD.

Technical levels to watch