Gold just had best week since 2016, and traders see a bigger surge ahead

Gold is a big winner with investors flocking to the precious metal as the market swings violently on coronavirus fears.

Piper Sandler chief market technician Craig Johnson is eyeing an even bigger move ahead.

According to Johnson, the Philadelphia Gold and Silver Index (XAU), which tracks the price of gold, has strong technicals that are setting up for a bounce. It was trading at $1,679.53 on Monday morning. 

"When I look at the chart, to me the next resistance comes in at around $1,785 and then after that, it's going to be $1,885," he said Friday on CNBC's "Trading Nation." "So I think there is more room for gold to work and I would be a buyer of it in small positions in people's portfolios."

Danielle Shay of Simpler Trading is eyeing gold for a bounce to $1,730, as even the Fed's emergency rate cut and jobs numbers couldn't save the markets.

"We have a variety of factors here: We have the emergency rate cut, we have the flight to safety in bonds, and then we have no buyers coming into the S&P anywhere," she said in the same "Trading Nation" interview. "So yes, I do think gold has room to run, and I'm a buyer."

In terms of a trade, Shay would look to trade the SPDR Gold Shares ETF (GLD), which on Friday hit new highs not seen since 2013. The next time there's a pop in equities, Shay said, she would sell put credit spreads in GLD or buy the longer-dated delta-70 calls.

Shay also prefers GLD over the VanEck Vectors Gold Miners ETF (GDX), given that GDX has underperformed relative to GLD. The latter is currently up 10 percent this year while the miners is up fractionally.

Last week, gold notched its best week since 2016 and hit its highest levels since 2013.