• Gold price dips from fresh highs near $2,430 as investors don’t see Middle East tensions escalating further.
• US bond yields soar as the Fed seems to initiate the rate cut cycle from September.
• The US Dollar exhibits strength ahead of the monthly United States Retail Sales data for March.

Gold price (XAU/USD) struggles for a firm footing near $2,350 in Monday’s European session after posting hefty losses on Friday. The precious metal loses shine in the very-short term as investors expect that geopolitical tensions will not escalate further. United States President Joe Biden said that his nation will not support the counterattack from Israel on Iran.

Receding Federal Reserve (Fed) rate cut bets for the June and July meetings, combined with less fears of further escalating Iran-Israel tensions, have put some pressure on Gold. The 10-year US Treasury yields rally to 4.55% as Fed policymakers support keeping interest rates restrictive before they get convinced that inflation will return to the required rate of 2%. Higher bond yields weigh on the Gold price as they increase the opportunity cost of holding an investment in it.

The US Dollar Index (DXY), which tracks the US Dollar’s value against six major currencies, prints a fresh five-month high near 106.00 ahead of the monthly Retail Sales data for March, which will be published at 12:30 GMT. Robust spending by US households remains a major catalyst to higher inflation, allowing businesses to charge higher from consumers. The monthly Retail Sales are expected to have grown modestly by 0.3% compared to the prior reading of 0.6%.