Gold Price Forecast: XAU/USD trades firmly near $3,400, sees resistance around $3,440

LONDON (August 28) Gold price (XAU/USD) holds onto gains near $3,400 during the European trading session on Thursday. The precious metal demonstrates strength as traders are increasingly confident that the Federal Reserve (Fed) will cut interest rates in the September monetary policy meeting.

Lower interest rates by the Fed bode well for non-yielding assets, such as Gold.

According to the CME FedWatch tool, there is an 87% chance that the Fed will cut interest rates in the September monetary policy meeting.

On Wednesday, New York Fed Bank President John Williams also stated that there is need to push interest rates to neutral, citing Gross Domestic Product (GDP) growth risks, and ongoing economic adjustments. Williams kept the door open for interest rate cuts in the September meeting, however, he stated that officials want to see data before jumping on a conclusion.

Fed Williams’s dovish remarks on interest rates have weighed on the US Dollar. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades subduedly near 98.00.

Going forward, investors will focus on the United States (US) Personal Consumption Expenditure Price Index (PCE) data for July, which is scheduled for Friday.

In Thursday’s session, market participants will pay close attention to the second estimate for Q2 Gross Domestic Product (GDP) data.

FXStreet