Gold Price Forecast: XAU/USD posts modest gain above $3,650 on potential Fed monetary policy easing

• Gold price trades with mild gains around $3,685 in Monday's early Asian session. 
• Signals of monetary policy easing from the Fed and rising geopolitical risks support the Gold price.
• Traders brace for the Fedspeak later on Monday for fresh impetus. 

The Gold price (XAU/USD) posts a modest gain near $3,685 during the early Asian session on Monday. The yellow metal edges higher as the US Federal Reserve (Fed) cut the interest rates at its September meeting, as widely expected. Traders will take more cues from the Fedspeak later on Monday. 

The Fed reduced its benchmark rate by 25 basis points (bps) last week, the first rate cut of 2025. This decision was supported by signs of a softening labor market and concerns about employment risks, despite inflation remaining somewhat elevated. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. 

Fed Chair Jerome Powell emphasized the rate cut as a "risk-management cut" and stated that future decisions would be made "meeting by meeting," suggesting a less dovish than expected easing cycle than some investors anticipated. This, in turn, might lift the US Dollar (USD) and weigh on the USD-denominated commodity price. 

Traders will also monitor the developments surrounding geopolitical risks. CNN reported that Russia carried out a major drone and missile attack across the country overnight into Saturday, according to Ukrainian President Volodymyr Zelensky. Despite diplomatic attempts to resolve the conflict, the war has increased in recent months. Geopolitical tensions in the Middle East and Eastern Europe could boost a traditional safe-haven asset like Gold.