The price of gold continues to fall on Tuesday as fears of the military conflict between Israel and Iran spreading to other countries in the Middle East subside.
The XAU/USD pair fell 1.02% over the past 24 hours to 2,303.77, with June US gold futures down 1.29% at $2,316.05.
Despite the overnight attack on US forces in the Middle East, hopes have increased that the Iran-Israel conflict will not escalate further, FX Street reported.
Iran made it clear on Friday that it had no plans to respond to the Israeli missile strike, as it was designed to avoid casualties.
In addition, growing expectations that the Federal Reserve (Fed) will keep interest rates on hold for longer due to robust inflation and the economy also weighed on gold demand.
CME's FedWatch data showed that the markets are currently pricing in a 46% chance of a Fed rate cut in September.
However, the Fed's hawkish expectations are keeping the 10-year Treasury yield above 4.6%, supporting the dollar and putting pressure on the XAU/USD.
Traders are now awaiting the preliminary US first-quarter GDP data and the US personal consumption expenditures (PCE) price index, which is the Fed's preferred gauge for determining inflation.
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