For thousands of years, gold has been used as a trading commodity. Despite the increasing prevalence of fiat currency, gold remains a popular asset for secure investments and trading.
Traders can use gold to protect other investments or as a secure option that offers stability in the long term and is less vulnerable to drastic changes in value than most other currencies.
Do you want to know what time gold is most volatile?
Let’s read!
It is best to trade gold when the market is fully active. That is the time when gold becomes the most volatile trading object. At that time big marketers trade this asset at a high level. However, this time is not the best all the time. It may be changed according to the market from where you start trading.
Many traders choose gold against other currencies because they think it is the safest and most profitable. If you are considering trading gold or seeking ways to maximize your profits, here are a few tips on the optimal time to trade it.
What Time Is Gold Most Volatile
Gold is an ultimate secure asset, and has been used as a hedge against economic instability for many years. However, the value of gold has changed with the passage of time.
Traders want to know the main factors affecting gold volatility. Several elements include international news, shifting economic conditions, etc. Read further to gain more knowledge about gold volatility.
Best Days To Trade Gold
Gold is considered the most volatile commodity, and its price also changes quickly. That’s why there is no specific time to trade it. Certain days or periods may be more unsuitable than others. So traders should be active during these times to make the right trading decisions about when to buy or sell gold.
The most doubtful time for gold trading is the time of economic data is brought out. For example, the numbers of unemployment and expansion rates.
Gold prices can also be impressed by political events. Moreover, holidays are also a big reason for increased volatility in the gold market.
How Do You Start Gold Trading (7 Tips)
When considering gold trading, it is essential to remember that the metal is most unpredictable during the London and New York sessions. This is due to the vast number of traders and deals during these times.
There nine common tips listed below to help you start trading gold:
● Keep New York Close In Mind
When trading gold, a high level of liquidity is seen during New York trading hours. Trading during these times offers more liquidity and less volatility, making it a perfect option for safe positions. On the other hand, off-hours trading can give the extra volatility needed to carry out trading plans, but this is also risky.
● Target Previous Highs And Lows
Gold usually trades in a specific range, so you can follow a simple technique to find buy/sell possibilities at previous highs/lows of the pair. For instance, when gold is rising, traders may open a position and target a prior high as their sell price, or vice versa.
Since gold is generally steady, these prior highs/lows are likely to be attained in due course. However, this isn’t suitable for day trading since reaching them may take some time.
● Examine Geopolitical Suggestions On Currencies
In times of political or economic instability, gold can be a safe haven for safeguarding one’s liquid assets. It is a reliable option for protecting investments from the volatility of other forex markets, given its strong correlation to the U.S. dollar and other stable currencies such as Japan’s yen.
● Make Analysis By Symmetrical Triangle
A symmetrical triangle is a chart pattern that suggests a period of unification that could result in a price breakout. It is characterized by two trend lines that are both sloping in opposite directions but at the same angle.
Most traders use this pattern with other technical indicators, such as liquidity or the relative strength index. The symmetrical triangle can provide additional confirmation when these indicators select a specific price breakout.
● Search Gold Demand Commercially
The fixed global supply of gold can cause prices to change depending on the increased market demand. There are many sources behind it, such as industries needing gold in their products or services, or people buying gold jewelry for fashion and investment purposes. Particularly in foreign markets, gold is found as an expensive item.
● Keep An Eye On Central Bank Buying
Central banks often purchase gold as safety against potential volatility in specific currencies. When central banks start buying gold in large quantities, it conveys two messages to forex traders. Firstly, governments are taking action based on their calculations that major currency values may decrease, which persuades traders to invest their capital in low-risk trades.
Secondly, increased central bank buying typically causes a rise in the price of gold. You can gain a big profit with an increase in the gold price.
● Find Original Rates Of Interest
Gold prices have a documented link to real interest rates, increasing when interest rates drop and decreasing when they rise. It is easy to calculate the real interest rate by subtracting the inflation rate and the official rate.
According to history, gold rates arise with the fall of interest rates.
So, keep following this rate as it can help you find good buying chances particularly if you’re looking for long-term trading options.
Final Words
Here we are going to put our post into a nutshell. Gold is the most traded object nowadays.
Gold’s best trading time depends on the volume and the market activity. It decreases and increases according to trading market conditions. Its volatility changes according to the London Gold market. It is most volatile when the gold market of London is open and working actively.
Gold is most volatile at the time of day when the London gold market is open and active.
The reason behind such a high level of volatility is that London is the heart of the gold global market.