Commentary: Gold has been quietly >GLD) ETF, is currently forming a large >DROOY), for instance, surged in October and has since been trading in a bull flag pattern. Volume has been tapering off throughout the consolidation, which is a healthy sign. DROOY would be worth watching on any strength that carried it over the trendline that is marking the outer confines of the bull flag.

Royal Gold, Inc. (Nasdaq:>>AUY) is another gold miner that is near the top of a recent consolidation. It has been trading between $17 and $13 since August, as it builds a base. AUY may need some more time before it can sustain a breakout, but the $17 level is certainly worth monitoring. Any close above this level could signal the next trend move higher.

The Bottom Line
Gold has really been out of the limelight for a few months after a much-publicized rally. Talk of a bubble has subsided and gold is really not that far off its all-time highs. While it may not head directly back to test its recent highs, there is a chance that the metal can gain some momentum.

Gold mining stocks have typically followed the metal higher and are showing signs of strength, so it is very possible that this group catches a bid soon. If this is the case, then traders certainly don’t want to be late to the party.