Gold Price Forecast: XAU/USD stays volatile within range, setting off the Fed week.

.Gold wobbles around $3,650 early Monday, but stays in the previous week’s trading range.
US Dollar rebounds on short covering, as a cautious market mood helps.
US-China trade talks and Fed rate call remain in focus for a fresh directional impetus.
Gold buyers refuse to give up yet, despite extreme overbought conditions on the daily chart.

Gold is moving back and forth in a familiar range around the $3,650 barrier, kicking off a big central bank week early Monday.

Gold holds ground after weak Chinese data

The latest uptick in Gold appears to be sponsored by the weaker-than-expected China’s activity data for August, which stoked expectations that China will roll out additional stimulus measures to stimulate economic growth.

China’s Industrial Output expanded at 5.2%, slowing from the 5.7% pace of the previous month, while Retail Sales rose only 3.4% from a year ago following a 3.7% growth in July. Both indicators surprised markets to the downside.

Additionally, Gold capitalizes on a lack of progress on day 1 of a fresh round of trade talks between the United States (US) and China in Madrid, Spain, on Sunday.

The talks are centered on the TikTok, trade and economic issues, expected to continue until Wednesday.

Furthermore, markets trade with caution ahead of the critical US Federal Reserve (Fed) policy announcements, keeping any downside cushioned in Gold.

The Fed is widely expected to cut fed fund rates by 25 basis points (bps) as the central bank grapples with a slowing labor market, stubborn inflation and an unprecedented push by US President Donald Trump for lower borrowing costs

Speculations are rife over a 50 bps rate cut, while markets are also betting on three rate cuts this year, beginning this week. Gold tends to benefit in a low-interest rate regime.

Ahead of the Fed verdict, the US-China trade talks and the Retail Sales report would keep Gold traders entertained