Gold Price Forecast: XAU/USD holds below $3,050 amid hopes for Ukraine peace deal

• Gold price extends its downside to near $3,025 in Monday's early Asian session. 
• Hope for a Ukraine peace deal undermines the safe haven assets like Gold. 
• The Fed held rates steady but maintained projections for two cuts, which might cap the downside for Gold. 

The Gold price (XAU/USD) extends the decline to around $3,025 during the early Asian session on Monday. The precious metal edges lower after reaching an all-time high on Thursday amid hopes for a Ukraine peace deal. However, potential rate cuts signaled by the Federal Reserve (Fed) and ongoing economic uncertainties might cap the upside for yellow metal. 

On Sunday, Ukrainian and US officials held talks in Riyadh, Saudi Arabia, resuming efforts to end three years of war as President Donald Trump pushes for a ceasefire. Ukrainian Defense Minister Rustem Umerov stated that the discussion over the weekend was "productive and focused." 

Umerov highlighted key points, including proposals to protect energy facilities and critical infrastructure. US and Russian delegates are expected to hold separate talks on Monday. The optimistic developments surrounding Russia and Ukraine's ceasefire dampen the gold demand, a traditional safe-haven currency. 

On the other hand, the prospect of further rate reductions might help limit the non-yielding Gold's losses. The Fed has held interest rates steady at meetings in January and March due to waiting for further progress on disinflation at the time. The US central bank sees a high degree of uncertainty in the economic outlook. Policymakers projected imply an average of two cuts in 2025, as updated last week.  

Fed Chair Jerome Powell said last week that US President Donald Trump's policies, including import tariffs, may have slowed US economic growth and increased inflation. "Gold is not even acting as a safe-haven asset yet to retail investors because technically we're not in a recession. We are seeing the slowdown in the economy and that could very well create further uncertainty and more desire for safe-haven assets," said Alex Ebkarian, chief operating officer at Allegiance Gold.