Gold Price Forecast: XAU/USD bears are stepping in below $2,000

• Gold price is meeting resistance in the right-hand shoulder. 
• All eyes are on the Federal Reserve this week. 

The Gold price is carving out a topping pattern below the highs of the $2,000s that were scored at the start of this week. At the time of writing, Gold price is trading near $1,979 and has traveled between $2,009.85 and $1,965.99 so far this week for the initial balance. 

Fundamentally, bank stocks are a driving force that rallied on Monday with a tentative sigh of relief due to the rescue of Credit Suisse with UBS buying the troubled bank for 3 billion francs ($3.2 billion). The speedy measure to stem contagion, however, does not guarantee anything and some argue that was has occurred is just the tip of the iceberg.  For instance, shares in First Republic Bank, the lender drawing the most concern from US investors right now cratered 33.5% on Wall Street on Monday following S&P Global downgrading its credit ratings deeper into junk on Sunday.

"If you think about where we were a year ago, the Fed was just starting its rate-hiking cycle. So over the next couple of quarters, you're going to get those long and variable, cumulative and lagged impacts hitting the market further," Bob Michele, the global head and CIO of fixed income at J.P. Morgan Asset Management, told Bloomberg TV. "So I think this is the tip of the iceberg. I think there's a lot more consolidation, a lot more pain yet to come."

It’s also possible that “we just go from one weak institution falling over to the next,” said Vicky Redwood, senior economic adviser at Capital Economics. There are no other obvious candidates that could be singled out like Credit Suisse, but it’s “hard to predict where the problems will emerge,” she explained.

All eyes on the Fed

Meanwhile, the Gold price will be sensitive to the US Dollar and the Federal Reserve this week. Fed funds futures show a 26.9% probability of the Fed holding its overnight rate at a current 4.5%-4.75% when policymakers conclude a two-day meeting on Wednesday. Consequently, the yield on benchmark 10-year Treasury notes to was at its highest in 3.50% compared with its US close of 3.397% on Friday. The two-year yield, which rises with traders' expectations of higher Fed fund rates, touched 4.00% compared with Friday's close of 3.846%.

´´Despite banking regulators rushing to shore up market confidence, the uncertain macro backdrop continues to entice buying. Bullion-backed ETF saw strong inflows, with SPDR Gold Share’s holding increasing by more than 204kz last session,´´ analysts at ANZ bank explained.

´´Swaps traders remain split on whether the US Federal Reserve will hike again this year. All eyes now shift to the Fed’s two-day meeting. Any dovish commentary should help support the precious metals sector.´´

Gold technical analysis

The Gold price could be forming a topping pattern in the right-hand shoulder of the head and shoulders on the 4 and 1-hour charts: