Recession fears further underpin safe-haven Gold price

Apart from this, the cautious mood is seen as another factor acting as a tailwind for the safe-haven XAU/USD. The market sentiment remains fragile amid growing worries about headwinds stemming from the worst yet COVID-19 outbreak in China. Furthermore, the protracted Russia-Ukraine war has been fueling worries about a deeper global economic downturn. This, in turn, tempers investors' appetite for riskier assets and drives some haven flows towards traditional safe-haven assets, including Gold price. The upside, however, remains limited as traders seem reluctant ahead of the key event/central bank event risks from the United States.

Traders await this week’s key macro data from United States

Investors prefer to move to the sidelines and look to the first estimate of the fourth-quarter US GDP growth, due on Thursday. Any signs of a weaker US economy will be taken as a reason for the Fed to slow the pace of its rate-hiking cycle, which should benefit the non-yielding Gold price. Apart from this, this week's release of the US Personal Consumption Expenditures (PCE) Price Index on Friday will influence the Fed's interest rate strategy and provide some meaningful impetus to the XAU/USD. The focus, however, will remain glued to the highly-anticipated FOMC monetary policy decision, scheduled to be announced next Wednesday.

In the meantime, the US macro data - the flash PMI prints and the Richmond Manufacturing Index - could produce short-term opportunities later during the early North American session this Tuesday. Apart from this, traders will take cues from the US bond yields, which, along with the USD price dynamics and the broader market risk sentiment, could drive Gold price. Nevertheless, the fundamental backdrop seems tilted in favour of bullish traders and supports prospects for an extension of a nearly three-month-old bullish trajectory.