• Gold price drifts lower for the second successive day amid receding geopolitical tensions. 
• Reduced Fed rate cut bets continue to underpin the USD and contribute to the downfall.
• The fundamental backdrop warrants some caution before placing aggressive bearish bets.

Gold price (XAU/USD) plunged over 2% on Monday and registered its biggest daily loss since June 13, 2022, amid receding fears about a wider Middle East conflict, which dented demand for traditional safe-haven assets. Apart from this, reduced bets for interest rate cuts by the Federal Reserve (Fed) drag the non-yielding yellow metal to sub-$2,300 levels, or over a two-week low during the Asian session on Tuesday. 

With the latest leg down, the Gold price has corrected over 5% from the all-time peak touched earlier this month. Any further decline, however, seems limited in the wake of speculation that major central banks will cut interest rates this year. Traders might also refrain from placing aggressive bets and prefer to wait on the sidelines ahead of this week's key US macro releases, starting with the flash PMIs on Tuesday.

The focus, meanwhile, remains glued to the Advance US Q1 GDP report and the Personal Consumption Expenditures (PCE) Price Index, scheduled for Thursday and Friday, respectively. The crucial data will play a key role in influencing expectations about the Fed's future policy decisions and drive the US Dollar (USD) demand, which, in turn, should provide some meaningful impetus to the Gold price.