Whether or not your friend is gay is personal to them and they should decide how to share that with you. Having said that, there are some things you can look for to help figure out their orientation and identity.
Pay attention to how he talks about women. If he gets bashful or tongue-tied around them, this could be an indicator that he is gay. You can also watch for language that seems feminine, but be careful - some guys have naturally feminine ways of speaking, and this doesn't necessarily mean they are gay.
Don't judge him based on what kinds of media he likes. Just because he listens to Lady Gaga or loves musicals doesn't mean he's gay; many straight people enjoy these kinds of media as well. Similarly, the kind of movies he watches may give you some clues but is not a very accurate way to gauge his sexuality.
Another thing to note is his beliefs about the origins of homosexuality. Many scientists believe it is a genetic trait passed down through the chromosomes, while some straight people believe that it's simply a result of early childhood experiences.
Keep in mind that some people choose to stay closeted for a variety of reasons. For instance, they might be afraid of losing their jobs or even their families because they're openly gay. They might also be worried about the reaction of family and friends who are violently homophobic. Consequently, it's important to respect your friend's right to privacy and not to "out" them, especially to people in their inner circle.