Gold Price Forecast: XAU/USD climbs to near $3,450 amid Israel-Iran conflict

• Gold price gains momentum to around $3,445 in Monday's early Asian session. 
• Fears of a broader conflict in the Middle East boost the safe-haven flows, supporting the gold price. 
• Traders now see an 80% chance of a Fed rate cut in September. 

The Gold price (XAU/USD) attracts some buyers to near $3,445 during the early Asian session on Monday. The precious metal rises to over a one-month high due to escalating Middle East tensions and rising bets of a Federal Reserve (Fed) rate cut. 

Investors ignored the upbeat US economic data released on Friday. Data released by the University of Michigan on Friday showed that the Consumer Sentiment Index rose to 60.5 in June versus 52.2 prior. This reading came in above the market consensus of 53.5. 

Renewed geopolitical concerns in the Middle East following an Israeli attack on Iran continue to underpin the Gold price, a traditional safe-haven asset. Iranian officials underscored that they would "respond firmly to any adventurism" from Israel.

"Israel knocking out Iranian targets is causing a little bit of geopolitical scare in the market. Prices will stay elevated in anticipation of what is to come, the retaliation by Iran," said Daniel Pavilonis, senior market strategist at RJO Futures.

The Fed is expected to leave its policy rate in the 4.25%-4.50% range at its June meeting on Wednesday. However, traders now expect a quarter-percentage-point rate cut by September. Before last week's US inflation data, traders had expected the Fed to wait until December to deliver a second rate cut. Rising expectations of a Fed rate cut lift interest-bearing assets like Gold.