A Representative Chart of the Precious Metals Industry

A Representative Chart of the Precious Metals Industry

The importance of charts in presenting objective data about an industry makes them vital tools for decision making. Precious Metals sector is no exception

The greatest advantage of advanced trading software is its ability to help online traders make informed moves from the comfort of their homes. One vital quality traders and investors need is the ability to understand charts.

Charts could reveal a great deal about stocks and markets. Using these, we can find out a lot about certain sectors. Uncertainty and volatility have been plaguing the financial markets right from October, causing traders to focus on other segments including fixed income, reserve currencies and precious metals. We’re focusing on the latter since that segment is particularly generating a great deal of excitement. One of the reasons for that is the news of Newmont Mining Corporation (NEM) buying Goldcorp ($GG) for $10 billion.

What a Chart Reveals about an Industry

So what can charts tell us about the precious metals industry? Where could the prices be headed? How would active traders be positioning themselves? A look at one chart reveals observations that have been witnessed throughout the industry.

Here’s the chart of the ETFS Physical Precious Metals Basket Shares ($GLTR) by StockCharts and quoted in this Investopedia article by Casey Murphy:

image of precious metals chart

We usually see active traders head to trendlines, moving averages and other such technical tools. $GLTR is one of their favourite funds. This has just broken past its combined 200-day moving average and descending trendline resistance. With the rising upward momentum, we find 50-day moving average being reversed in its direction. It looks likely to close higher than the 200-day moving average. This is the first instance since May 2017 and the blue circle in the chart highlights this. This move is called a golden cross. A golden cross is a bullish indication. Where you find a security’s moving average that is relatively short-term breaking past the security’s long-term moving average.

Is a Major Uptrend Starting in Precious Metals?

This movement in the chart is often considered by technical analysts as the start of a significant uptrend. Traders will most probably be looking to get into a long position that is the closest possible to $61.14 so as to fully capitalize on the risk-reward ratio. It is likely that stop-loss orders could be placed below the newly found support if the underlying fundamentals shift or if trader sentiment undergoes some change.

Just a look at the aforementioned chart reveals that precious metals can easily draw the interest of active traders during volatile periods. The acquisition of Goldcorp has also helped garner greater exposure for this segment. This and the breakouts happening beyond major resistance levels could be the catalysts to major moves being made higher up in the precious metal prices.

With such charts and advanced trading platform, online stock trading becomes a more informed activity. TradeZero provides this level of advanced charting access while also providing the ability to trade for free.

 

 

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Tradezero

TradeZero is an online broker dealer that offers commission free trading of the US equity markets, US equity and index options trading. Its clients receive up to 6 to 1 intraday leverage and the ability to trade the US markets without any pattern day trading rules. TradeZero clients have access to a variety of cutting edge trading platforms which include real-time streaming market data.

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