Gold faced intense pressure by opening a new all-time high around $2,265 in early New York trading yesterday (Monday).
However, the price of the yellow metal briefly fell as the US dollar surged shortly after the release of the upbeat US Institute for Supply Management (ISM) Manufacturing PMI for March.
The ISM reported that the Manufacturing PMI landed at 50.0 for the first time in 16 consecutive months. A figure below the 50.0 threshold indicates that business activity in the US manufacturing sector contracted during this period.
The Manufacturing PMI rose to 50.3 from an expected 48.4 and the previous reading of 47.8. The New Orders Index jumped to 51.4 from 49.2 in February.
Meanwhile, the price of gold is now at $2,251.40 which has remained since it closed yesterday's trade.
The US Dollar Index (DXY) was seen stronger against six major currencies rising to 104.90 as upbeat factory data showed a sharp recovery in the US economic outlook.
For now, uncertainty ahead of a busy week in the US economic calendar will keep short-term demand strong.
Gold is still showing strengthening as expectations of the Federal Reserve (Fed) aimed at June cuts have increased in the market.
Fed Chairman Jerome Powell confirmed the decline in February's core Personal Consumption Expenditure (PCE) inflation data as the Fed looked for more evidence of price pressure easing to its 2% target.
A higher forecast for the Fed to cut its rates after two years could affect yields on yielding assets such as US bonds as well as boost the value of gold investments.
The 10-year US Treasury yield edged up slightly in the European session on Monday but was down to 4.20%.
