5 Important Gold Trading Tips for Beginners

Gold has risen in popularity in recent years as forex traders seek safe investments that help hedge against inflation, market volatility, and other geopolitical variables impacting currency values. Traders can use gold etf as hedge against other assets or as a haven that provides consistency over time and is less susceptible to extreme price volatility than many other currencies.

September 16, 2021

Gold has risen in popularity in recent years as forex traders seek safe investments that help hedge against inflation, market volatility, and other geopolitical variables impacting currency values. Traders can use gold etf as hedge against other assets or as a haven that provides consistency over time and is less susceptible to extreme price volatility than many other currencies.

XAU/USD is one of several gold pairings offered by xauusd in forex brokers today, making it easier than ever to include gold into your forex trading strategy. Gold's price stability over time makes it a valuable asset during inflationary periods like the one we now see.

As the COVID-19 epidemic rattles the global economy, foreign governments and clever Forex traders put more money into gold to hedge against inflationary losses. Economic practices like printing more money may undermine global currencies, causing them to lose value compared to stable assets like gold.

The relative stability of gold is due primarily to its relatively constant global volume, which cannot be significantly expanded in the same manner that governments may create other paper currencies. Here are five gold trading tips to keep in mind if you want to make better use of gold and capitalize on possible profit possibilities.

1. Day-Trade with a focus on New York Close.

Although gold is a virtually 24-hour market, peak liquidity is usually seen during New York trading hours. Depending on your objectives, you should target trades during or after New York trading hours.

Off-hours gold trading times might give the additional volatility needed to implement scalping methods, whereas deals during peak activity offer tremendous liquidity and low volatility, making them excellent targets for safe-haven holdings. At the same time, the additional volatility raises the relative risk of any deal.

2. Simplify your analysis by focusing on previous highs and lows.

Because Gold tends to trade in a range, one of the simplest methods is to look for buy or sell chances inside the trading pair's prior highs and lows. Traders can enter a position in gold while it is moving up, for example, and set a selling price based on a previous high, or vice versa.

Because gold is a very stable asset, it will probably return to prior highs or lows in the future. It should also be noted that this is not a viable strategy for day trading because hitting these goals might take time, and range-bound techniques usually do not give rapid profit chances as momentum strategies do. Nonetheless, it is a low-risk strategy meant to profit from consistent XAU/USD price movement.

3. Consider the Geopolitical Issues on Currencies

When there is political or economic instability, gold may be a reliable haven that safeguards your liquid assets.

Gold trading in forex market is closely associated with the US dollar and other stable currencies such as the Japanese yen, and taking a position with XAU/USD may be a safe way of protecting your assets against unpredictability in different currency markets.

4. Analyze using the Symmetrical Triangle

The symmetrical triangle is a basic chart pattern that suggests a period of consolidation before a price breakthrough. Symmetrical triangles are formed by the convergence of two trend lines with similar slopes but are moving in opposite directions. Price movement on the pairs becomes tighter when consolidation occurs, offering a possible trading opportunity on a breakthrough.

Traders commonly use the symmetrical triangle pattern with other technical indicators like liquidity and the relative strength index. When other indications point to a possible price breakout, the symmetrical triangle can provide further confirmation and boost confidence in placing an order when gold trading in forex.

After the two trend lines converge, a stop-loss order may be set immediately below the descending trend line, and sell orders can be issued if the price of XAU/USD successfully breaks out.

5. Monitor Gold's Industrial and Commercial Demand

Because of gold’s fixed worldwide supply, increased market demand for gold can increase xauusd price today. Demand may manifest itself in a variety of ways. Because of gold's importance in consumer projects, several sectors may boost their gold purchases. Gold is used in various goods and solutions in the medical and technology industries, for example.

Consumer demand for gold jewelry can also have an impact on pricing. Consider worldwide demand in foreign countries where gold jewelry is regarded as a luxury item and an investment asset.

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