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Does intraday technical trading have predictive power in precious metal markets?

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  • Batten, Jonathan A.
  • Lucey, Brian M.
  • McGroarty, Frank
  • Peat, Maurice
  • Urquhart, Andrew

Abstract

Previous research has identified that investors place more emphasis on technical analysis than fundamental analysis, however the research has largely been confined to daily data and stock market indices. This paper studies whether intraday technical trading rules have any significant predictive power in the precious metals market through three popular moving average rules. We find that using the standard parameters previously used in the literature, technical trading rules offer no predictive power whatsoever. However after utilising a universe of parameters, we find a number of parameter combinations offer significant predictability in the gold market, but there remains no significant predictability in the silver market. Our results show that the longer parameters of the technical trading rules are more successful than the traditional parameters chosen in the literature. Therefore intraday technical trading rules have some predictive power in the gold market but offer no significant predictability in the silver market.

Suggested Citation

  • Batten, Jonathan A. & Lucey, Brian M. & McGroarty, Frank & Peat, Maurice & Urquhart, Andrew, 2018. "Does intraday technical trading have predictive power in precious metal markets?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 52(C), pages 102-113.
    • Handle: RePEc:eee:intfin:v:52:y:2018:i:c:p:102-113
    DOI: 10.1016/j.intfin.2017.06.005
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    8. Sermpinis, Georgios & Hassanniakalager, Arman & Stasinakis, Charalampos & Psaradellis, Ioannis, 2021. "Technical analysis profitability and Persistence: A discrete false discovery approach on MSCI indices," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 73(C).
    9. Jin, Xiaoye, 2022. "Performance of intraday technical trading in China’s gold market," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 76(C).
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    More about this item

    Keywords

    Precious metals; Technical analysis; Predictability; Gold; Silver;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets

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