Best Time to Trade Gold

Best Time to Trade Gold

Gold has been traded for thousands of years now. And despite the leading role of fiat money as a medium of exchange, it doesn’t lose its popularity either as a safe haven asset or as a trading instrument. Whether you consider starting to trade this precious metal or simply looking for ways to increase your profit from it, read a few recommendations on the best time to trade gold.

Key points

  • XAU/USD is an extremely popular trading instrument.
  • Same as currency pairs, XAU/USD can be traded anytime on weekdays.
  • Gold has a negative correlation with the dollar, and XAU/USD is highly affected by the news.
  • The most active trading hours for trading XAU/USD coincide with the American trading session.
  • Many profitable opportunities for trading XAU/USD come up in light of economic news, such as consumer price index (CPI), nonfarm payrolls, FOMC meetings, etc.

How to Trade Gold in Forex

Gold can be traded in multiple ways, from futures contracts to CFDs. One extremely popular way of trading gold is forex trading, where the precious metal is considered a currency (XAU) and traded in pairs with fiat currencies. The most popular of them is USD. By exchanging American dollars for gold, traders bet that the precious metal will rise in price and profit from the difference when selling XAU/USD back at a higher price. Generous leverage offered by FX brokers allows earning pretty impressive returns even with a relatively small amount of money invested.

Forex Gold Trading Hours

The forex market where XAU/USD is traded is open from Monday to Friday, 24 hours a day. It allows those wanting to trade the pair to open their laptops at any convenient weekday time and place an order. However, not all time is equally advantageous for trading. Whatever instrument you trade, it is best to trade it during the most active market hours, when big market participants heavily trade this asset. The hours when XAU/USD is traded in high volume are the best to enter the market due to increased volatility, high liquidity, and as a result, tight spreads.

How to Choose Time for Trading Gold

The most active XAU/USD trading takes place during the North American trading session (3 pm – 11:00 pm GMT+3). Slightly less activity is observed during the European session (10:00 am – 6:00 pm GMT+3). You can find an approximate schedule for both sessions with regards to respective time zones in the table below.

Country New York session London session
Malaysia (GMT+8) 8:00 pm – 4:00 am 3:00 pm – 11:00 pm
Indonesia (GMT+7) 7:00 pm – 3:00 am 2:00 pm – 10:00 pm
South Africa (GMT+2) 2:00 pm – 10:00 pm 9:00 am – 5:00 pm
Argentina, Brazil (GMT-3) 9:00 am – 5:00 pm 4:00 am – 12:00 pm

Despite what was said above, spikes in trading activity and profitable opportunities may sometimes take place beyond the schedule. What can really trigger activity in the market is important news. And this is one of the reasons why gold is particularly popular among so-called news traders.

Best Time to Trade Gold XAU
Trading volume spikes on an XAU/USD chart

Trading Gold on News

Of course, the price of gold is predetermined by the supply/demand ratio. This is why it must be interesting for you to monitor stocks of gold mining companies, as well as industrial and commercial demand. But it’s hardly the whole picture. Like other pairs, XAU/USD is susceptible to news. Everything from elections to armed conflicts can’t help but push the price of gold one way or another. Understanding the effects certain events can have on the price of the metal is beneficial to traders.

Since gold has a negative correlation with the American dollar, basically any economic release that can trigger changes in the USD quotes must be closely monitored by an XAU/USD trader. If you don’t want to miss spikes in the price of gold, you should definitely follow these events:

  • Inflation reports

    High inflation goes hand in hand with the growing price of gold. The clearest evidence of a positive correlation between inflation and gold prices occurred in the late 1970s and early 1980s in the US when some of the highest inflation rates were witnessed.
  • Fed interest rate decisions

    The price of gold tends to rise as the interest rates decline. There is a correlation between negative interest rates and gold prices. Previously, negative interest rates in the US were accompanied by a dramatic rise in gold prices.
  • Nonfarm payrolls

    It is proved that employment statistics can cause sudden moves of gold prices. Good labor market data support the dollar. Conversely, weak jobs reports send the dollar down. Since the falling USD almost always means rising gold prices, bad employment statistics are bullish for the price of gold.

Read more: Forex Trading for Beginners in 2022

Best Time to Trade Gold

Final Words

Having been long considered a safe haven asset, gold serves as a hedge against many turbulences that fiat currencies may endure. Being a heavily traded pair, XAU/USD has both sufficient trading volume and volatility to offer lots of opportunities to profit on intraday positions. It is particularly important to build a sound trading schedule for people interested in short-term trades. To make the best out of XAU/USD, traders focus on the most active trading hours, which is justified by high trading volume. The time of the day when gold is traded the most is around 3:00 pm – 11:00 pm (GMT+3).

Traders should not ignore events that can trigger significant gold price changes. Particular events that can bring additional opportunities for high-profit speculation in the market include inflation reports, consumer price index (CPI), nonfarm payrolls, FOMC meetings, etc.

About JustMarkets

JustMarkets is the world’s trusted broker that offers 180 popular trading instruments. By having a trading account on JustMarkets, you benefit from advantageous conditions, including high leverage, low spreads (from 0.0 pips), as well as commission-free deposits and withdrawals. And if you have any questions, there is a helpful support team working round the clock to ensure you have the most convenient trading experience.

Try your hand at currency trading by opening a demo account on JustMarkets. It’s a quick and risk-free way to master trading in the most liquid financial market. A practice account will help you learn trading basics and develop a strategy before investing money. Start trading today to take care of your future tomorrow.

FAQ on Trading Gold on JustMarkets

How do you trade gold?

Trading gold is a multifaceted venture and can be approached in a variety of ways, such as futures contracts and CFDs. However, one of the most popular methods on JustMarkets is through forex trading. In forex trading, gold is considered a currency and is represented by the symbol XAU. It is primarily traded against the U.S. Dollar (USD) in the pair known as XAU/USD. The fundamental idea is to buy this pair when you anticipate the gold prices will rise and sell when you expect them to fall. Generous leverage options are also available to magnify returns, although this also increases risks.

Can beginners trade gold?

Absolutely, yes. Beginners are very much welcome in the realm of gold trading. JustMarkets offers demo accounts that simulate real trading environments but use virtual money. This is an excellent way for beginners to get acclimated with trading dynamics, market analysis, and the platform's features. We strongly recommend trying out the demo account to grasp the basics before moving on to live trading.

Why should you trade gold?

Gold has been a stable investment and a safe haven for centuries. In modern times, it offers an excellent avenue for diversification and can act as a hedge against inflation and currency fluctuations. Trading XAU/USD on JustMarkets provides numerous opportunities for profit, given its high volatility and sufficient trading volume. The asset is particularly popular among news traders, who use economic indicators and global events to make trading decisions.

Is it safe to trade in gold?

Safety in trading is a critical concern, and it varies depending on the platform you use. JustMarkets, being a globally trusted and licensed broker, ensures a secure trading environment. The platform offers high leverage, low spreads, and commission-free deposits and withdrawals. These features collectively contribute to making gold trading as safe and lucrative as possible.

Is trading gold profitable?

The profitability of trading gold is largely contingent on market timing, strategy, and the platform you use. XAU/USD is a heavily traded pair with high volatility, offering multiple opportunities for both short-term and long-term gains. JustMarkets offers a technologically advanced platform with a range of tools and features that can help maximize your trading profitability.

How is gold traded on the market?

In the forex market, gold is traded as XAU/USD and is open for trading 24 hours from Monday to Friday. Traders looking for optimal times to trade should consider the North American trading session (3 pm – 11:00 pm GMT+3) as it records the highest trading volume and volatility. You can trade using JustMarkets' user-friendly platform, which also provides valuable market insights and news updates.

What are the transaction costs involved?

Trading gold on JustMarkets involves various costs that traders should be aware of. These can include spreads, which are the differences between the ask and bid prices, and overnight swap charges for positions held open after the trading day ends. However, JustMarkets takes pride in offering competitive spreads and low fees to make your trading experience cost-efficient.

What leverage can you use?

Leverage is a powerful tool that allows you to control a large position with a relatively small amount of capital. JustMarkets offers leverage options up to 1:3000 for trading gold, which can significantly amplify both profits and losses. We recommend traders to use leverage cautiously and in line with their risk tolerance.

How to use technical indicators?

JustMarkets' trading platform comes equipped with a host of technical indicators like Moving Averages, RSI, and MACD, designed to help you make more informed trading decisions. These indicators can be easily applied to the XAU/USD chart for analysis. While useful, it's crucial to remember that indicators are not foolproof and should be used in conjunction with other market analysis tools.

Can I trade gold on mobile?

Yes, you can. JustMarkets offers a robust mobile application compatible with both Android and iOS devices. The app allows you to trade gold on the go, ensuring you never miss out on a potential trading opportunity. Features like real-time quotes, advanced charting tools, and one-touch trading make mobile trading both convenient and efficient.

by JustMarkets, 2024.01.11

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