GOLD PRICE FORECAST: XAU/USD BEARS FLEX MUSCLES AROUND $1,990 AS CLUES FOR US GDP LOOM

Gold price (XAU/USD) stays defensive around $1,995 as the metal buyers await fresh clues to defend the two-day uptrend amid early Wednesday. In doing so, the XAU/USD struggles amid cautious optimism in the market, as well as anxiety ahead of a key clue for the United States Gross Domestic Product (GDP) for the first quarter (Q1), namely the Durable Goods Orders for March.

While portraying the mood, S&P 500 Futures rises half a percent while paring the biggest daily loss in a month, backed by upbeat tech earnings released late Tuesday. Additionally, the US 10-year Treasury bond yields prod a two-day downtrend while the US two-year bond coupons remain pressured. That said, the US Dollar Index (DXY) retreats to 101.70 after snapping a three-day downtrend the previous day.

Talking about the key catalysts, upbeat earnings from Microsoft and Alphabet join US President Joe Biden’s warning to use the veto to avoid the US default also underpin the cautious optimism in the market and trigger a pullback in the Gold price.

“President Biden on Tuesday threatened to veto legislation being pushed by House Republican leaders that would condition support for raising the debt ceiling on deep spending cuts, calling it “a reckless attempt to extract extreme concessions as a condition for the United States simply paying the bills it has already incurred,” per the Washington Post.

Previously, fresh banking fears, triggered through the First Republic Bank (FRB), joined the US debt ceiling talks and mixed US data to prod the market sentiment and propelled the XAU/USD run-up due to the metal’s haven demand.

Moving on, the US Durable Goods Orders for March, expected to improve to 0.8% versus -1.0% prior, will join the market’s risk appetite and the US Dollar moves to determine short-term XAU/USD performance ahead of the US Q1 GDP.