Gold Price Forecast: XAU/USD holds above $2,700 on softer US Dollar, geopolitical risks

• Gold price attracts some buyers to near $2,720 in Monday's early Asian session.
• Heightened geopolitical tensions between Russia and Ukraine lift the Gold price. 
• The cautious stance from the Fed might cap the upside for Gold. 

The Gold price (XAU/USD) jumps to around $2,720 during the early Asian session on Monday. The sell-off in the US Dollar (USD) provides some support to the USD-denominated Gold price. Additionally, rising geopolitical tensions continue to underpin safe-haven assets like yellow metal. 

Investors will closely monitor the developments surrounding the Russia-Ukraine conflicts. Last week, Russian President Vladimir Putin lowered the threshold for a nuclear strike in response to a broader range of conventional attacks, days after reports said Washington DC, had allowed Ukraine to use US-made weapons to strike deep into Russian territory. This, in turn, might boost the safe-haven flows, benefiting the precious metal price. 

"It's really one main geopolitical factor that's at play here in the gold market over the course of the last several days - the increased tensions between Ukraine and Russia is probably most notable," noted David Meger, director of metals trading at High Ridge Futures.

On the other hand, several Federal Reserve (Fed) officials remain cautious about rate reductions, which might cap the Gold's upside. The market is adjusting its expectations for the Fed's cuts next year as inflation is becoming a bigger concern. Higher rates reduce the appeal of gold. According to the CME FedWatch Tool, futures traders are now pricing in 50.9% odds that the Fed will cut rates by a quarter point, down from around 69.5% a month ago.