Gold Price Forecast: XAU/USD grinds higher past $2,010 support amid US default fears

• Gold price prints mild gains to pare Friday’s heavy losses during two-day rebound.
• Market sentiment remains dicey amid unimpressive Fed bank survey details.
• Cautious mood ahead of US debt ceiling talks, mixed Fed talks keep XAU/USD traders on their toes.

Gold price (XAU/USD) edges higher past $2,000 round figure as it consolidates Friday’s heavy losses during a two-day uptrend to early Tuesday, up 0.12% intraday near $2,023 by the press time.

In doing so, the yellow metal benefits from the market’s cautious mood ahead of the US negotiations on avoiding the default. However, the recent rebound in the US Dollar and the Treasury bond yields, as well as inflation expectations, prod the XAU/USD buyers amid a sluggish session.

US Dollar Index (DXY) defends the previous day’s rebound near 101.50 amid firmer signals from the US inflation expectations per 10-year and 5-year breakeven inflation rates from the St. Louis Federal Reserve (FRED) data. Also favoring the greenback’s gauge could be the market’s fears fuelled by comments from US Treasury Secretary Janet Yellen’s actions. Reuters shares news suggesting US Treasury Secretary Janet Yellen’s personal reaching out to business and financial leaders to explain the "catastrophic" impact a US default on its debt would have on the U.S. and global economies, two sources familiar with the matter said on Monday.

On the contrary, unimpressive details of the Federal Reserve’s (Fed) quarterly bank loan survey, showed tighter standards and weaker demand for commercial and industrial (C&I) loans to large and middle-market firms, as well as small firms, over the first quarter, seem to prod the XAU/USD traders.

As a result, S&P 500 Futures struggle for clear directions despite posting mild losses around 4,150 whereas the US 10-year and two-year Treasury bond yields struggle to extend the three-day uptrend during early Tuesday.

Looking forward, a light calendar may allow the Gold price to grind higher ahead of the key debt-ceiling talks in the White House. Any negative outcome, which is more likely, can weigh on the US Dollar and propel the XAU/USD.

Gold Price technical analysis

Gold price grinds higher within a $20 trading range comprising the 100-Hour Moving Average (HMA) and the 200-HMA, respectively near $2,030 and $2,010.

Adding strength to the upside filter is a one-week-old horizontal resistance zone while an upward-sloping trend line from the last Tuesday increases the strength of the $2,010 support confluence.

That said, sluggish MACD signals and steady RSI (14) suggest the continuation of the XAU/USD’s slower grind towards the north.

It’s worth noting that $2,060 holds the key for the Gold price rally towards refreshing the all-time high, currently around $2,080, whereas the $2,000 psychological magnet acts as an additional downside filter to watch for the XAU/USD bears before taking control.

Gold Price: Hourly chart

Trend: Gradual upside expected