For most of the past year, active traders around the globe have been scouring the markets to find potential trading candidates that are poised to make a move higher. Based on the bullish chart patterns shown in the article below, the answer could be found in precious commodities such as gold and silver, which have both broken above the resistance of long-term trendlines. We’ll investigate several assets that have strong exposure to rising gold and silver prices and try to determine where they could be headed from here. (For more, see: The Industry Handbook: Precious Metals.)

The Turnaround in Gold

One of the most popular exchange traded funds that is used by active traders for gaining exposure to gold prices is the SPDR Gold Trust Shares ETF (GLD). For those new to commodities trading, the GLD fund is the world’s largest ETF that is backed by physical gold. The fund has a total net asset value of nearly $30 billion and has an expense ratio of approximately 0.40%. Taking a look at the three-year weekly chart below, you can see that the price of gold has been trading within an extreme downtrend, but the recent close above the resistance (shown by the blue circle) suggests that the bulls are now in control of the momentum. Technical traders will also use the sharp increase in volume (shown by the black circle) as confirmation that the breakout is valid and that the reversal is set to continue. Bullish traders will likely set their stop-loss orders just below the dotted trendline just in case of an unexpected pullback. (For more on this topic, see: Gold Stocks Turn: Where To Buy.)

iShares Silver Trust

Commodity traders also have their eyes on the price of silver, which like GLD, has recently broken above a key descending trendline (shown by the blue circle). While the breakout is not quite as pronounced as the chart shown above, the iShares Silver Trust (SLV) is still worth taking note of because the bullish crossover between the MACD indicator and its signal line (shown by the black circle) is a technical buy signal that suggests a more significant move higher could be in the cards. (For related reading, see: Commodities: Silver.)

Barrick Gold

When it comes to trading precious metals stocks, many traders automatically turn to Barrick Gold Corp. (ABX) because it is the world’s largest gold miner. The company recently announced that it plans to spend $2 billion if it proceeds with key projects in Nevada and Peru and that it plans on reducing debt over the course of the year. The positive news combined with the rising price of gold has many traders rushing to take a position. Taking a look at the chart below, you can see that the momentum is definitely in favor the bulls over the short-term, but the recent crossover between the 50-day and 200-day moving averages (shown by the blue circle) also signals the beginning of a long-term uptrend. Active traders will expect the uptrend trend to continue until the price closes back below the 200-day moving average, which is currently at $8.69. (For more, see: The Top 5 Gold Stocks For 2016.)

The Bottom Line

It isn't a secret that there haven't really been bullish commodities to get excited about for over the past year. However, based on the bullish moves above key trendlines shown in the article above, the downtrends seem to be finally reversing, and the recent upward momentum could be enough of a sign to trigger a shift in sentiment. Technical traders will likely keep a bullish outlook on the precious metals segment until the prices close back below their respective 200-day moving averages. (For more, see: Breakout Opportunity Stocks.)

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