(Kitco News) - June Comex gold futures are softer heading into early New York trade. The U.S. dollar index is modestly weaker and both markets could see choppy, consolidative type of trade short-term.
On the daily gold chart, the recent selling pressure stalled above a 61.8% Fibonacci retracement of the first quarter 2014 rally move, which comes in around $1,265 per ounce. Swing low support ahead of the retracement is seen at $1,277.40, hit on April 1. That is an important short-term chart zone to monitor.
On the upside, initial resistance lies at $1,307.50. If the bulls can muster gains through that ceiling, the next upside objective lies at the 20-day moving average around $1,323.30. Daily momentum indicators, including slow stochastics and the 9-day relative strength index have recently turned or are turning higher from oversold levels. But, momentum has yet to develop into a strong trend higher. If sustained gains were achieved over the 20-day moving average that would show the bulls are gaining some traction.
The near term trend remains down, but the market sees strong downside support near term. There is potential for a choppy, sideways range trade to develop between the $1,307.50 and $1,277-1,265 zone near term. If sustained losses were seen under $1,265 that would register a strong bearish signal on the chart.
Kira Brecht is managing editor at TraderPlanet.
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