• Gold price reverses an intraday dip on Wednesday, though lacks follow-through. 
• Economic woes and the worsening US-China ties benefit the safe-haven metal.
• A modest USD strength might cap gains ahead of the FOMC meeting minutes.

Gold price attracts some dip-buying near the $1,920 area and climbs to the top end of its intraday trading range during the early part of the European session. The XAU/USD, however, remains below the weekly high touched on Tuesday and currently trades around the $1,927-$1,928 region, up less than 0.15% for the day.

The disappointing Chinese macro data, along with the worsening US-China relations, temper investors' appetite for riskier assets and turn out to be a key factor that benefits the safe-haven Gold price. In fact, the Caixin/S&P Global Services PMI fell from 57.1 in May to 53.9 last month - the lowest reading since January. This comes after China introduced export curbs on two metals - widely used in semiconductors, electric vehicles and high-tech industries - to the United States (US). This marks a potential escalation in a trade conflict between the world’s largest economies and might cause more disruption to global trade, which, in turn, could further undermine already weak economic conditions.

The upside for the Gold price, however, is likely to remain capped in the wake of a more hawkish stance adopted by major central banks, including the Federal Reserve (Fed). In fact, the US central bank had signalled in June that borrowing costs may still need to rise as much as 50 bps by the end of this year. Moreover, the markets have been pricing in a greater chance of a 25 bps lift-off at the next FOMC monetary policy meeting on July 25-26. This, in turn, remains supportive of elevated US Treasury bond yields, which acts as a tailwind for the US Dollar (USD) and contributes to keeping a lid on any meaningful upside for the non-yielding yellow metal, warranting some caution for bullish traders.

The USD, meanwhile, lacks bullish conviction amid the uncertainty over the Fed's future rate-hike path. It is worth recalling that the softer US PCE Price Index released on Friday, along with Monday's weaker US ISM PMI, raised questions over how much headroom the Fed has to continue with its monetary policy tightening cycle. Hence, the market focus will remain glued to the release of the June FOMC meeting minutes, due later during the US session. Investors will closely scrutinize minutes for cues about the Fed's near-term policy outlook, which, in turn, should play a key role in influencing the USD price dynamics and help determine the near-term trajectory for the XAU/USD.

Technical levels to watch