Gold Price Forecast: XAU/USD wobbles around $4,250, awaits fresh cues on US-China trade outlook

• Gold price trades sideways around $4,250 as investors seek fresh cues on the US-China trade outlook.
• US President Trump expresses confidence in reaching a consensus with Chinese leader Xi.
• The Fed is almost certain to cut interest rates in the October policy meeting.

Gold price (XAU/USD) trades in a tight range around $4,250.00 during the European trading session on Monday. The precious metal stabilizes after Friday's corrective move, which pushed it lower from the all-time high of $4,380 to near $4,200.

The yellow faced intense selling pressure on Friday after comments from United States (US) President Donald Trump signaled that an additional 100% tariffs announced by Washington on imports from China will not be sustained for long.

The scenario of easing global trade tensions diminishes the appeal of safe-haven assets, such as Gold.

"High tariffs were not sustainable though it could stand," Trump said in an interview with Fox Business over the weekend. Trump expressed optimism that he could reach a fair deal with Chinese leader Xi Jinping in the meeting scheduled later this month in October.

Broadly, the outlook of the Gold price is upbeat as traders remain highly confident that the Federal Reserve (Fed) will cut interest rates in the policy meeting later this month. According to the CME FedWatch tool, traders are almost certain that the Fed will reduce interest rates by 25 basis points (bps) to 3.75%-4.00% in the October policy meeting.

Ahead of the Fed's policy meeting, investors will pay close attention to the US Consumer Price Index (CPI) data for September, which will be released on Friday.

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

Gold technical analysis

Gold price corrects from its all-time high near $4,380 posted on Friday. The overall trend of the Gold price remains bullish as the 20-day Exponential Moving Average (EMA) slopes higher around $4,011.89. The upward-sloping trendline from the August 22 low around $3,321.50 will act as key support for the Gold price.

The 14-day Relative Strength Index (RSI) stays above 60.00 for a long period, suggesting a strong bullish momentum.

On the upside, the Gold price would struggle to extend its upside above the fresh all-time high of $4,380. Looking down, the psychological level of $4,000 would act as key support.

Gold daily chart