RSI Gold Indicator Overbought and Oversold Levels

RSI technical indicator values of above 70 are considered to be over bought: gold traders consider points above the 70 level as market tops & good points for taking profits.

RSI technical indicator values of below 30 are considered to be over sold: gold traders consider points below the 30 level as market bottoms and good points for taking profits.

These overbought and oversold gold trading levels should be confirmed by RSI center line crossovers trading signals. If these regions give a market top or bottom, this gold signal should be confirmed with RSI center line crossover gold signal. This is because these overbought and oversold levels are prone to giving whipsaws in the xauusd market.

In the xauusd trading example illustrated and explained below, when the RSI hit 70, it showed that the gold trading was overbought, & this could be considered a trading signal that the trend could reverse.

The gold chart then reversed the gold trend after a short while and started to move downward, until it got to the oversold levels. This was considered a gold market bottom after which the gold chart started to move upward again.

Overbought and Oversold Levels - RSI Gold Trading Strategies

Over Extended Overbought and Oversold Levels

When the xauusd market is trending strongly upwards or downwards the RSI indicator will stay at these overbought and oversold levels for a long time. When this happens these overbought and oversold regions cannot be used as gold market tops and gold market bottoms because the RSI indicator will stay at these levels for an extended period of time. This is the reason why we say that the overbought and oversold regions are prone to gold trading whipsaws and it is best to confirm these xauusd signals using RSI center-line crossover strategy.

Over Extended Overbought & Oversold Levels - RSI Gold Indicator Strategy