Chances that the Fed will hold rates in July and September rose above 50% after the data release, lifting the US Dollar alongside the US Treasury bond yields while smashing Wall Street stocks. Risk-aversion extended into Asia to sponsor the latest leg higher in the Greenback against its major peers. The US Dollar Index is challenging five-month highs near 106.40, at the time of writing.

Mixed China’s Gross Domestic Product (GDP) and activity data also added to the downbeat risk tone, underpinning the US Dollar’s haven demand. China's economy grew 5.3% in the first quarter of 2024, surpassing estimates of a 5.0% growth. Despite this, March Retail Sales and Industrial Output fell short of expectations. China's property market struggles persist, with 1Q New Home Sales falling nearly 31% over the year.

Further, hawkish comments from San Francisco Fed President Mary Daly bolstered the Greenback. Daly said on rate cuts, “the worst thing to do is act urgently when urgency isn't necessary.”

However, Gold price appears resilient to a firmer US Dollar, helped by a retreat in the US Treasury bond yields from multi-month highs. Easing geopolitical tensions between Israel and Iran also fails to deter Gold buyers, as they bide time before the next push higher.  

“Iran is willing to exercise restraint and has no intention of further escalating the situation,” Iranian Foreign Minister Hossein Amir-Abdollahian told the Chinese counterpart in a phone call early Tuesday.

Investors, however, remain on a cautious footing, as a renewed flare-up in Israel and Iran conflict cannot be ruled out. Next of note for Gold traders remain Fed Chair Jerome Powell’s speech and speeches from a few other Fed policymakers, as the US economic docket is relatively light this Tuesday.

Geopolitical developments in the Middle East will be closely followed for fresh trading incentives in Gold price.