An interesting piece of research co-authored by Brian Lucey on efficacy of technical analysis in gold & silver markets: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2652637.
“This paper studies whether intraday technical trading rules produce significant payoffs in the gold and silver market using three popular moving average rules.”
And the conclusions are (emphasis is mine): “The initial results show that the SMA, WMA and EMA trading rules generate significant negative payoffs using the parameters common in the literature in the high-frequency gold and silver markets. This suggests that there is no significant profit to be gained from technical trading in the gold and silver markets. However, our parameter sweep results show that there are a number of parameter combinations that generate significant profit in the gold market, but none in the silver market. Further, the best performing rules have different parameters to those used the existing literature. We show that longer run averages should be used by investors on intraday data and that investors need to employ different parameters when utilising technical analysis on daily and intraday data. In order to examine whether investors could have actually utilised the best performing rules, we perform an in- and out-of-sample test and show that only the SMA rule for gold generates significant profits in the in-sample as well as the out-of-sample period. All of the other best rules in the in-sample period generate either insignificant or negative payoffs in the out-of-sample period.”