US CPI DATA: Possible Impact on GOLD | TAPERING to guide the further direction

If the US CPI print comes in hotter than the consensus of a 0.4% rise in May, it will ramp up the Fed’s tapering expectation, which will render negative for the non-yielding gold. The ECB could also hint towards dialing back of the emergency bond-buying programme.

Sellers could target the immediate support at the horizontal trendline connecting previous lows at $1881. A breach of the latter could trigger a drop towards the June 4 low of $1856. Ahead of that, a demand area around $1865 could offer some reprieve to the bulls.

Any recovery attempt could face stiff resistance around the $1891-$1895 region, where the 21, 50 and 100-simple moving averages (SMA) collide. Further up, the triangle resistance at $1900 will challenge the bullish commitments. The previous month high at $1913 is the level to beat for the optimists.

MUST READ: Forecast from eight banks

Expected crash: 1866 zone (+/-10) in SS1 1106
Expected rise: 1896/1907 zone

Fib Reversals:

M30 Possibility of heavy resistance at 50% and 61.8%
Resistance
1890-96/1900-1907 zone

H4: Possibility of reversals at 38.2% / 61.8%
Support
1866/1860 – 1836-1827 zone

H1: Possibility of reversals from 23.6% and 0.0% Support
1870/1866/1856 (4 June low)

SMA

M30 SMA
1888

H1SMA
1890

H4 SMA
1893

As per our algorithm:

BUY at DAILY LOWS | Exit in 25% reversal price zone.

M15 M30 H1 BUY Alerts AWAITED.
Following can act as catalyst for price reversals/trend:

US China Trade Talks
Ireland Tensions
G7 meeting
Weaker 10 Y Yields
Weaker DXY
Inflation Concerns and Projections
US Interest Rate related Statements