Gold Price Forecast: XAU/USD extends downside to below $3,350 amid trade progress

• Gold price drifts lower to near $3,335 in Monday's early Asian session.  
• Optimism on trade deals undermines Gold's safe-haven appeal. 
• The Fed is expected to hold the interest rate steady on Wednesday.

The Gold Price (XAU/USD) extends the decline to around $3,335 during the early Asian session on Monday. The precious metal trades in the negative territory for the fourth consecutive day as progress on the US-EU trade deal hits safe-haven demand. Traders brace for the US Federal Open Market Committee (FOMC) policy meeting later on Wednesday. 

Market sentiment improves after the EU and the US have reached a framework trade agreement that sets a blanket 15% tariff on goods traded between them, ending a months-long stand-off. The 15% tariff rates will take effect on August 1. Additionally, the US and China, the world's two largest economies, are expected to extend their tariff truce by another three months, the South China Morning Post reported, citing unnamed sources. The risk-on sentiment weighs on the yellow metal, a traditional safe-haven asset. 

The US Federal Reserve (Fed) has held its benchmark interest rate between 4.25% and 4.5% this year. Analysts expect the central bank won't lower interest rates at its July meeting on Wednesday despite US President Donald Trump's persistent pressure. According to the CME FedWatch tool, markets have priced in nearly a 62% chance of a rate cut on September 1. 

Gold traders will closely monitor the FOMC press conference for some hints about the timeline of rate reduction this year. Most Fed officials appear to be content to continue waiting to see how tariffs will move through the economy before they make any cuts. US tariffs. However, any surprise dovish remarks from Fed policymakers could boost the non-yielding Gold price as it becomes more attractive when interest rates fall or stay low.