Top indicators for forecasting and trading gold

By Paul Reid

25 September 2023

The financial world consists of hundreds of reliable assets for you to trade, but one precious instrument stands out from the rest and has been one of the most popular choices for traders of all levels for decades - gold (symbol XAU). 

Gold has always been at the very heart of commerce and remains a haven asset that even the biggest institutions continue to rely on. And in today’s uncertain times, the popularity of gold is on the rise once again, and traders are recognizing opportunities on the horizon.

If the next XAU breakout is similar to those of the past, recognizing the early signs and trading at the optimum time could be cause for celebration. When it comes to gold, news reports are often reporting the hype long after the best entry points are gone, but technical traders can forecast reversals, rallies, and crashes long before the media gets wind of the changes. Before you make your next XAU trade, consider using these indicators.

TOP 3 Indicators for trading XAU

The 3 must-know indicators for trading gold with the help of technical analysis.

1 . Moving Averages (MA).

Moving averages is a super popular indicator for forecasting gold and other assets. If you lay an MA on a chart and then look back over the last month, you’ll see places where the MA lines cross. Whenever the lines crossed, XAU made a reversal. There’s no better place for an entry point than the early stages of a reversal. Lay an MA today and see if now is a good time to trade gold.

2 .  Bollinger Bands 

On the XAU chart, check to see if the price is touching one of the outer bands of the Bollinger Bands. A touch on the lower band indicates a weakening in the trend or even a coming price rise. Touching the upper band suggests a price reversal to the downside.

3 . Fibonacci Retracement

After laying Fibonacci levels, keep your eye on the primary level of 61.8% (0.618). It is known as the golden ratio or golden mean. Technical traders work on the assumption that if a retracement or price fallback reaches this level and then slows, there is a strong likelihood that the trend will resume its original direction.


In addition to the mathematical properties of these three popular indicators, there is also a self-fulfilling prophecy involved. If the above indicators forecast a rise, then countless traders will start to buy gold, and that positive trading volume causes a rise in demand and consequently price. 

Traders quick to discover signals can benefit the most from an accurately forecasted direction, so checking the XAU chart often is recommended.

Another top tip for gold traders is to look at the highs and lows over the last few weeks and compare them with the highs and lows over the last 2 years. If the price is low in both the short-term and the long-term, there could be an epic opportunity brewing.

Lastly, with growing uncertainty around world currencies and economies, it’s not a stretch to imagine that big investors will run back to the oldest safe haven asset of all time. Prior to the last recession of 2008/2009, gold dipped briefly, and then rocketed for 3 years while house prices and stocks burned. If that happens again, having your Exness account active and funded might be the best thing you can do this year. Get ready for the next golden opportunity… it might have already begun.

This is not investment advice. Past performance is not an indication of future results. Your capital is at risk, please trade responsibly.


Paul Reid
Paul Reid

Paul Reid is a financial journalist dedicated to uncovering hidden fundamental connections that can give traders an advantage. Focusing primarily on the stock market, Paul's instincts for identifying major company shifts is well established from following the financial markets for over a decade.

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