Gold (XAU/USD) experienced significant selling pressure following a brief pullback near $1,970.00 during the Asian session. The precious metal has extended its decline to around $1,932.00 as the US Dollar Index (DXY) recovers and aims to reach a new daily high. Technically, the outlook suggests a bearish continuation for gold, with a potential decline to the 61.8% Fibonacci level at $1,905.50 before a possible pullback and price increase. The fundamental overview indicates that with the return of full market activity on Tuesday, the US Dollar is losing ground in anticipation of positive news on the US debt deal, which is boosting risk sentiment. The US Dollar correction is challenging the 104.00 level against other currencies, accompanied by a 1.70% drop in 10-year US Treasury bond yields. Gold is currently defending the key support level at $1,937. If the risk-on trading sentiment gains momentum, the downward pressure on gold could intensify, especially as the US Dollar correction is expected to be limited due to increased expectations of a 25 basis points rate hike by the Federal Reserve (Fed) in June. Recent strong US economic data and the hawkish outlook on interest rates from Fed officials have contributed to this view. The market is now pricing in a 57% probability of a June Fed rate hike, down slightly from Monday but significantly higher than the 15% probability seen a week ago. Attention will now shift to the release of top-tier US economic data, particularly the US Conference Board Consumer Confidence data. Gold traders will also closely monitor developments regarding the US debt agreement and any relevant commentary from the Fed for further trading guidance.