U.S. equities are holding just below the unchanged line on Monday as investors focus on the flooding in Houston following Hurricane Harvey. But there is action underway in precious metals, with gold breaking to the upside and hitting levels not seen since last October. This has pushed gold prices up and over a massive multi-month consolidation range.

A few dynamics are driving this. For one, headlines are being filled more and more with dread about the approaching debt-ceiling debacle. Two, the Federal Reserve is preparing for the start of “quantitative tightening” next month. And three, stocks look vulnerable to a pullback here as breadth continues to narrow, risk measures remain red-hot and valuations are at extremes.

As a result, investors are piling into gold-mining stocks in a big way. Stocks like Goldcorp Inc. (USA) (NYSE:GG), which is preparing to move up and out of a seven-month downtrend pattern. Watch for a possible move to the 200-day moving average, which would be worth a 6% gain from here.

Click to Enlarge The company will next report results on Oct. 25 after the close. Analysts are looking for earnings of nine cents per share on revenues of $848.9 million.

When the company last reported on July 26, earnings of 12 cents per share were 3 cents ahead of estimates on revenues of $862.5 million.

During the post-earnings call, management highlighted an all-in sustaining cost of production of $800 an ounce, versus $1.067 in the second quarter of 2016. The company has been aggressively focused on reducing its cost footprint, giving it leverage on the current rebound in metal prices.

Edge Pro subscribers have established a position in Sept $14 GG calls, which are carrying a bid/ask of 14 cents to 15 cents.

Anthony Mirhaydari is the founder of the Edge (ETFs) and Edge Pro (Options) investment advisory newsletters. Free two- and four-week trial offers have been extended to InvestorPlace readers.