Gold Price Forecast: XAU/USD edges lower near $2,400 on US Dollar rebounds

• Gold price extends the decline around $2,405 in Monday’s early Asian session. 
• The US PPI unexpectedly accelerated in June to its highest rate since March 2023. 
• Rising bets on Fed rate cuts might limit the precious metal’s downside. 

Gold price (XAU/USD) trades in negative territory near $2,405 on Monday during the early Asian session. The hotter-than-expected Wholesale price inflation in the United States for June weighs on the precious metal. Traders await the Chinese Gross Domestic Product (GDP) for the second quarter (Q2), along with the US NY Empire State Manufacturing Index for July and the Federal Reserve's (Fed) Mary Daly speech, which is due later on Monday. 

Data released by the Bureau of Labor Statistics on Friday showed that the US Producer Price Index (PPI) came in at 2.6% YoY in June from a revised up of 2.4% in the previous reading, beating expectations of 2.3%. On a monthly basis, the PPI rose 0.2% MoM in June, above the market consensus of 0.1%. Meanwhile, Producer Prices ex Food and Energy climbed more than expected on both a yearly and monthly basis. 

Nonetheless, the downside of the yellow metal might be limited amid the expectation that the Fed would start its easing cycle sooner than expected in September. It’s worth noting that a lower interest rate generally increases the attractiveness of Gold, a non-interest-bearing investment. Financial markets are now pricing in nearly 80% odds for a 25 basis points (bps) cut in September, according to the CME Fedwatch Tool. 

Furthermore, global political uncertainty and geopolitical tensions in the Middle East might boost the safe-haven flows, benefiting precious metals. On Saturday, former president  Donald Trump was shot in the ear during his rally in Butler, Pennsylvania, in what the FBI said was an assassination attempt, per CNN.