• Gold prices surged over 1% as US Retail Sales data indicates sustained economic robustness.
• Escalating geopolitical tensions between Iran and Israel heighten demand for safe-haven assets, boosting Gold.
• Strong US economic figures aside, Gold gains from physical demand and its safe-haven appeal amid geopolitical uncertainty.

Gold price climbed more than 1% in the mid-North American session following solid economic data from the United States (US). Consumer spending was stronger than expected, which could prevent the US Federal Reserve (Fed) from cutting borrowing costs, which would be a tailwind for the golden metal. Nevertheless, physical demand for Gold and risk aversion might keep the precious metal at around current levels.

XAU/USD trades at $2,384 after hitting a daily low of $2,324. Investors remain concerned about possible Israeli retaliation following Iran’s missile and drone attack over the weekend. Even though the White House urged Israel against retaliation, Israel's military chief said, “There will be a response to Iranian missiles and drones launched toward Israeli territory.”

That might underpin safe-haven assets, including Gold and the US Dollar. It wouldn’t be strange if they moved in tandem.

Elsewhere, US Retail Sales in March were robust. What grabbed the headlines was that sales in the control group—used to calculate the Gross Domestic Product (GDP)—skyrocketed sharply, which could be a prelude to strong growth in the first quarter of 2024.

Following the data release, Gross Domestic Product (GDP) estimates for Q1 2024 show that the US economy is expected to grow 2.8%, up from 2.4% estimated on April 10, according to the Atlanta GDPNow model.