Technical Analysis of Gold – Learn the Basics

Gold, also known as Yellow metal, is considered one of the safe havens from conservative investors. Most people think that gold price would be ever-rising and so they dump all their extra money on gold. While Gold is undoubtedly a safe investment, it’s incorrect to say that its price never falls. Gold prices also swing based on supply/demand and other macroeconomic factors. And the only way to predict it correctly is to apply the technical analysis and check what the charts tell you. In this article, we’ll understand the technical analysis of Gold, and also learn how to check the various technical indicators and charts to accurately speculate the price of Gold.

Why Technical Analysis for Gold?

Even today eyebrows are raised when people talk about guessing the future price based on certain chart patterns and mathematical indicators. Technical analysis is not still considered a full-proof way to analyze stock markets or any other financial avenues. For Gold, there is even more skepticism to use technical analysis as its generally traded by a set of people who are different from regular stock investors.

However, we strongly believe that technical analysis applies universally, irrespective of market, exchange, instrument, or whatever. If there is sufficient historical data to find out how the prices reacted to certain patterns or events, then technical analysis can baseline those and predict the future accurately.

And remember technical analysis works on the principle “Price discounts everything”, so it looks at the current and past prices to guess the future. This becomes even more interesting for Gold investment as its prices move based on several international macroeconomic factors and it’s almost impossible to keep track of everything. So technical analysis of Gold can come in handy to ignore those external factors and just focus on the chart.

Also Read: Does Technical Analysis really Work?

How to perform Technical Analysis of Gold?

Again, as stated above technical analysis is universal, and there are no special rules for Gold. The patterns or indicators that work for stocks do work for Gold also.

If you want to pick one among patterns or indicators, we would recommend sticking to patterns like Head and Shoulders, double tops, bullish/bearish engulfing, Doji, etc.

Among indicators, try looking at moving average crossovers, MACD, RSI, etc.

Apply these patterns or indicators on higher timeframe charts rather than intraday, as Gold movements are not that volatile always.

In most countries, Gold is traded as a commodity as well as ETF. You may pick any of these that you are comfortable with.

Gold Futures Technical Analysis Dashboard

Have a look at the gold futures technical analysis dashboard from Investing.com below:


It’s an all-in-one dashboard where you will get a consolidated view of technical indicators related to gold, each indicator’s sentiment (bullish or bearish), and the overall sentiment based on all the indicators.

Technical Analysis of Gold

This dashboard can help you a lot if you are an active gold investor. Just avoid buying when it is showing a Sell signal.

Also Read: Crude Oil Technical Analysis: How to Guide?

Final Words

We would heavily recommend using technical charts and indicators for gold or any other financial instruments that are traded on markets. It’s one of the easiest and most accurate ways to predict price movements. Technical analysis of Gold is a relatively novel concepts, very few are using it, but it’s something you should dig into sooner than later.

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