Gold Price Forecast: XAU/USD holds steady near $3,750 as traders digest Fed's Powell speech

• Gold price flat lines around $3,760 in Wednesday's early Asian session.
• Traders still expect Fed rate cuts in October and December after Fed cut rates by 25 bps earlier this month.
• The US PCE inflation report for August will take center stage later on Friday. 

The Gold price (XAU/USD) holds steady near $3,760 after retreating from an all-time high of $3,791 during the early Asian session on Wednesday. Rising expectations of further US rate cuts and safe-haven flows provide some support to the precious metal.

The US Federal Reserve (Fed) Chair Jerome Powell said on Tuesday that the central bank faces a "challenging situation" with ongoing risks of faster-than-expected inflation, while weak job growth raises concerns about labor market health. Powell added that he is comfortable with the current policy path, though he indicated the possibility of further cuts should the FOMC see the need to be more accommodative.

According to the CME FedWatch tool, markets are expecting two more 25 basis points (bps) Fed rate cuts, one each in October and December, with a 90% and 73% chance, respectively. Lower interest rates could reduce the opportunity cost of holding Gold, supporting the non-yielding precious metal. 

Additionally, the escalating geopolitical tensions in Russia boost the Gold price, a traditional safe-haven asset. NATO warned Russia that it would use "all necessary military and non-military tools" to defend itself as it condemned Moscow for violating Estonian airspace in "a pattern of increasingly irresponsible behaviour".

The attention will shift to the release of the US Personal Consumption Expenditures (PCE) Price Index for August data, the Fed's preferred measure of inflation. If the report shows a hotter-than-expected inflation outcome, this could lift the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term.