Gold Price Forecast: XAU/USD drifts lower to $3,350 despite Powell's dovish signal

• Gold price attracts some sellers to near $3,365 in Monday's early Asian session, down 0.22% on the day. 
• Fed rate cut hopes and rising Russia-Ukraine tensions could lift the Gold price. 
• Traders brace for the preliminary reading of the US Q2 GDP report later on Thursday. 

The Gold price (XAU/USD) edges lower to around $3,365 during the early Asian session on Monday, pressured by a firmer US Dollar (USD). Nonetheless, rising optimism of a September rate cut following comments by Federal Reserve (Fed) Chair Jerome Powell at the Jackson Hole symposium might cap the downside for the yellow metal. 

The Fed's Powell has opened the door to a rate reduction in the September meeting, but that position could become complicated if inflation pressures continue to rise. Powell added that the US economy is facing a "challenging situation," with inflation risks now tilted to the upside and employment risks to the downside.

Traders are now pricing in nearly an 85% possibility of a 25 basis points (bps) rate cut next month, up from 75% before the speech, according to the CME FedWatch tool. Dovish remarks from Powell could provide some support to the precious metal, as lower interest rates could reduce the opportunity cost of holding Gold. 

Additionally, the escalating tensions between Russia and Ukraine might contribute to the gold's upside. Ukrainian President Volodymyr Zelensky said that the country would continue to fight for its freedom "while its calls for peace are not heard," in a defiant address to the nation on its independence day, per BBC. His comments came after Moscow said Ukraine had attacked Russian power and energy facilities overnight, blaming drone attacks for a fire at a nuclear power plant in its western Kursk region.

Gold traders will keep an eye on the preliminary reading of the US Gross Domestic Product (GDP) for the second quarter (Q2), which will be released later on Thursday. The US economy is expected to grow at an annual rate of 3.0% in Q2. In case of a stronger-than-expected outcome, this could boost the Greenback and weigh on the USD-denominated commodity price.