The S&P SPDR Gold Trust ETF (GLD) shares rallied more than 8% off their December 2016 low to their high earlier this year.
Shares saw a modest pullback over the last month that looks like the handle of a large cup and handle continuation pattern. In Monday's session, the stock broke above the rim-line resistance level.
The relative strength index is tracking higher above a rising 21-period average. Daily moving average convergence/divergence, which is overlaid on a weekly histogram of the oscillator, is above its center line on both time frames. Chaikin money flow moved over its center line as the handle portion of the pattern was forming. The accumulation/distribution line crossed over its 21-period signal average.
Recent price action and the technical indicators could be signalling the start of a second phase of the rally in the precious metal fund.
While the cup and handle projects a pattern target objective back up to last November's high in the $125 area, there may be a better vehicle to trade the breakout.
Newmont Mining (NEM) shares rallied nearly 22% off their December 2016 low to their high this year, more than tripling the advance in the GLD fund. The shares have constructed an inverse head and shoulders pattern on the chart below neckline resistance in the $37 area.
The 3.2% move in Monday's session broke above pattern resistance. The price momentum and money flow indications are similar to those on the previous chart.
The Bollinger bandwidth indicator is at an extremely low level, reflecting band compression. This bandwidth reading suggests the breakout move may prove to be volatile, and the pattern projects a target price in the $43 area.
Newmont is a long candidate at its current level, using a trailing protective stop.