Spot Gold

Active traders generally use a combination of technical indicators such as the MACD, moving averages and trendlines when creating a forecast. Taking a look at the chart below, you can see that the price recently broke beyond the resistance of a consolidation pattern shown by the converging trendlines. The close above the upper trendline (shown by the blue circle) suggests that the bulls are in control of the direction and that the price could be gearing up to make a move toward the next level of resistance, which appears to be near $1350. The gold chart is also an interesting example of how the price of an asset behaves near key moving averages. Notice how the price bounced off of the support of the 50-day moving average (blue arrow) and how it moved lower when it tested the resistance of the 200-day moving average (red arrows). This type of behavior along with the bullish crossover between the MACD and its signal (black circle) will likely be used as confirmation that the trend is likely to head higher.

Barrick Gold

One of the largest players in the mining sector is Barrick Gold Corp. (ABX). Taking a look at the chart, you can see that the bulls have aggressively pushed the price higher from the lows, and the recent break above the short-term resistance suggests that the trend will continue. At this stage, gold companies are likely to be gathering the attention of momentum and breakout traders and strategic positioning of stop-loss orders could create lucrative risk/reward scenarios. Short-term traders will likely maintain a bullish outlook on the stock until the price closes below the trendline near $16 or the support of the 50-day moving average ($14.76). Longer-term traders will likely set their stop-losses below the support of the longer-term trendline near $13.

Goldcorp

Another major player in the gold market that deserves the attention of active traders is Goldcorp, Inc. (GG). Taking a look a the chart below, you can see that the long-term downtrend has recently shifted as shown by the golden crossover between the 50-day and 200-day moving averages (blue circle). The strength of the support that is offered by the 50-day moving average is obvious based on this chart and traders will likely keep a bullish outlook on the stock until the price closes below ($16.42).

The Bottom Line

The spot price of gold has recently broken above a key level of resistance, which has captured the attention of the gold bugs around the gold. As a group, gold-related assets have been some of the strongest performers found anywhere in the world. Based on the charts discussed in the article above, it seems that this story is likely to continue.