• Gold price gains ground near $2,395 in Monday’s early Asian session. 
• The easing PCE inflation data on Friday has paved the way for a widely anticipated September rate cut.
• The sluggish Chinese economy and less demand for Gold from Asian central banks might cap Gold’s upside. 

Gold price (XAU/USD) edges higher to $2,395 during the early Asian trading hours on Monday. The yellow metal gains ground on the hope of an interest rate cut by the Federal Reserve (Fed) in September after cooling US inflation data. Investors will closely watch the Fed Interest Rate Decision on Wednesday, with no change in rate expected. 

The recent evidence of progress on inflation has triggered expectations that the Fed would start easing monetary policy in September, which boosts the price of precious metals as lower interest rates generally reduce the opportunity cost of holding non-yielding bullion. Market analyst at forex.com, Fawad Razaqzada, said that the mixed-to-weaker US data on Friday indicated inflationary pressures and economic activity are waning, paving the way for the Fed to cut rates twice this year. 

The Personal Consumption Expenditures (PCE) Price Index increased 0.1% MoM and was up 2.5% YoY in June, in line with the market consensus, according to the Commerce Department. The year-over-year gain in May was 2.6%, while the monthly figure was unchanged.