Gold Price Forecast: XAU/USD trades firmly near $3,400, sees resistance around $3,440

• Gold price clings to gains around $3,400 ahead of second estimate Q2 GDP data.
• The Fed is almost certain to cut interest rates in the September meeting.
• Fed's Williams support interest rate cuts amid escalating GDP growth concerns.

Gold price (XAU/USD) holds onto gains near $3,400 during the European trading session on Thursday. The precious metal demonstrates strength as traders are increasingly confident that the Federal Reserve (Fed) will cut interest rates in the September monetary policy meeting.

Lower interest rates by the Fed bode well for non-yielding assets, such as Gold.

According to the CME FedWatch tool, there is an 87% chance that the Fed will cut interest rates in the September monetary policy meeting.

On Wednesday, New York Fed Bank President John Williams also stated that there is need to push interest rates to neutral, citing Gross Domestic Product (GDP) growth risks, and ongoing economic adjustments. Williams kept the door open for interest rate cuts in the September meeting, however, he stated that officials want to see data before jumping on a conclusion.

Fed Williams's dovish remarks on interest rates have weighed on the US Dollar. At the time of writing, the US Dollar Index (DXY), which tracks the Greenback's value against six major currencies, trades subduedly near 98.00.

Going forward, investors will focus on the United States (US) Personal Consumption Expenditure Price Index (PCE) data for July, which is scheduled for Friday.

In Thursday's session, market participants will pay close attention to the second estimate for Q2 Gross Domestic Product (GDP) data.

Gold technical analysis

Gold price trades in a Symmetrical Triangle, which indicates a sharp volatility contraction. The upper border of the above-mentioned chart pattern is plotted from the April 22 high around $3,500, while the downward border is placed from the May 15 low near $3,180.86.

The yellow metal wobbles near the 20-day Exponential Moving Average (EMA) around $3,362.00, indicating a sideways trend.

The 14-day Relative Strength Index (RSI) oscillates inside the 40.00-60.00 range, suggesting indecisiveness among market participants.

Looking down, the Gold price would fall towards the round-level support of $3,200 and the May 15 low at $3,121, if it breaks below the May 29 low of $3,245.

Alternatively, the Gold price will enter an uncharted territory if it breaks above the psychological level of $3,500 decisively. Potential resistances would be $3,550 and $3,600.

Gold daily chart