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• Gold Price trades flat near $2,500 in Tuesday’s early Asian session.
• Fed’s dovish remarks and rate-cut bets underpin the Gold price. 
• Easing geopolitical risks in the Middle East might cap the upside for XAU/USD. 

Gold Price (XAU/USD) hovers around $2,500 during the early Asian session on Tuesday. The rising expectation of the interest rate cut by the Federal Reserve (Fed) in September and further US dollar weakness are likely to underpin the precious metal in the near term. Fed Chair Jerome Powell’s speech at Jackson Hole will take center stage on Friday. 

The yellow metal reached a new all-time high of $2,509 on Friday, and the more dovish comments from the Fed officials this week might lift the Gold price as lower interest rates generally reduce the opportunity cost of holding non-yielding bullion. Chicago Fed President Austan Goolsbee stated that the US economy does not show signs of overheating, so Fed policymakers should be cautious about keeping restrictive policy in place longer than necessary. 

Meanwhile, Minneapolis Fed President Neel Kashkari said on Monday that it was appropriate to discuss potential US interest rates cut in September due to concerns about the weakening labor market. 

Traders will take more cues from the Fedspeak on Tuesday, with the Fed’s Raphael Bostic and Michael Barr set to speak. On Friday, Fed Chair Powell's speech at the Jackson Hole symposium might offer some hints about the path forward for interest rates.

On the other hand, easing geopolitical risks and risk-on sentiment could cap the upside for Gold. The United States said that Israeli Prime Minister Benjamin Netanyahu has accepted a bridging proposal aimed at resolving differences between Israel and Hamas. A de-escalation of tensions in the Middle East would most likely result in the geopolitical risk premium disappearing rapidly. 

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