Gold Price Forecast: XAU/USD extends upside above $2,500 as Fed hints at September rate cut

• Gold price gains momentum around $2,515 in Monday's early Asian session. 
• Fed's Powell said "the time has come" for the US Fed to begin lowering interest rates.
• The escalating tensions in the Middle East might further boost safe-haven assets like Gold. 

Gold price (XAU/USD) holds positive near $2,515 an ounce during the early Asian session on Monday amid the weaker US Dollar (USD) and dovish comments from the Federal Reserve (Fed). The uptick of the yellow metal is bolstered by the speech by Fed Chair Jerome Powell, signalling that time has come for interest rate cuts starting this September.

Fed Chair Jerome Powell delivered the dovish message at the Kansas City Fed's annual economic symposium in Jackson Hole on Friday, which has weighed on the USD broadly. Fed's Powell said that "the time has come" for the central bank to begin lowering interest rates. Powell acknowledged recent softness in the labor market in his speech and stated that the Fed did not "seek or welcome further cooling in labor market conditions." 

Financial markets have fully priced in a 25 basis points (bps) rate cut, while the chance for a deeper cut stands at 36.5%, up from 24% last week, according to the CME FedWatch Tool. The growing expectations of easing monetary policy by the Fed might further support the precious metal as it makes gold more attractive for other currency holders.

Furthermore, Hezbollah launched hundreds of rockets and drones at Israel early on Sunday, as Israel's military said it carried out a wave of pre-emptive strikes across southern Lebanon to thwart a large-scale rocket and drone attack by Hezbollah, per Reuters. The ongoing geopolitical tensions in the Middle East might boost the safe-haven asset demand, benefiting the Gold price.