Do trend rules work on gold? We tested 22 years of Indian prices
Trend-following rules are often said to work best on commodities. We tested them on gold and silver in rupees (world price × the dollar rate), the price an Indian buyer pays, using daily prices from 2004 to November 2026.
The rules tested
- Faber's 10-month rule: hold while last month's close is above the average of the last 10 month-end prices.
- Our trend score: the 10-month rule plus the 200-day trend, the 50/200-day cross, 3/6/12-month momentum, the Turtles' 55-day channel and RSI.
- Rating methods like the big websites': rebuilt from TradingView's, Investing.com's and Barchart's published rules (moving averages and oscillators).
Each was tested the same way: hold the metal only while the rule is positive, act the next day, 0.1% cost per switch.
Results for gold, 2010 to 2026
Figures from the test run of 9 November 2026. They change a little as new prices arrive.
| Method | Per year | Worst fall | Switches a year |
|---|---|---|---|
| Simply holding | +12.7% | −29.4% | 0 |
| Faber 10-month rule | +8.1% | −41.8% | 2.5 |
| Our trend score (with a macro model and season) | +6.8% | −44.4% | 7 |
| Barchart-style rating | +3.3% | −48.6% | 17 |
| Investing.com-style rating | −6.3% | −80.9% | 43 |
| TradingView-style rating | −6.5% | −81.4% | 53 |
Silver told the same story: holding +11.4% a year, the best rule +5.8%.
Why holding won
Gold in rupees rose strongly over these years, helped by a weaker rupee. Trend rules sell after a fall and buy back after a rise; in sideways years (2013-2015, 2017, 2021) they kept buying near short-term tops and selling near lows. The fast rating methods switched so often that costs and whipsaws destroyed them.
What the rules are still good for
The slower rules did tell good periods from bad ones a little: the 3 months after a positive Faber signal were on average about 2.8 percentage points better than after a negative one. That is useful to understand the trend, but it was not enough to beat holding.
Takeaway: for long-term gold savings, regular buying and holding beat every timing rule we tried. See today's estimated gold and silver rates.