December 2, 2022 9 min to read

Gold Trade (XAUUSD)

gold-trade

GOLD TRADE (XAUUSD)

UNDERSTAND THE CHARACTERISTICS OF XM GOLDBUILD UP IN A SHORT PERIOD OF TIME

On the official website of XM, Goldcurrent price, And you can check the trend of buying and selling gold of XM users.

You can check the gold trading trend on the XM official website below.

CHECK GOLD ON XM OFFICIAL WEBSITE.

It is displayed alongside other currencies at the top of the footer of the top page of the XM official link above, so please check it out. Also, you can check even if you don’t have an XM account.

First, let’s take a look at the benefits of trading gold with XM.

BENEFITS OF TRADE GOLD WITH XM

• trends tend to continue in the same direction

• Volatility is much higher than forex

• Easy to make profit with scalping

• Advantages of trading gold

Why Do Trends Continue?

Gold tends to follow trends more easily than exchange rates.

Since the exchange is a currency in Forex, the main currency changes depending on the time of day, so the price movement immediately reverses.

So while trends can last for a long time, they tend to be temporary.

On the other hand, unlike currency exchange, gold is not a currency but a financial asset common to all countries.

The advantage is that the charts are relatively easy to analyze on XM as the trends continue in the same direction .

Why the volatility is so high?

In the case of FX exchange, the rate does not change significantly throughout the year, but gold has overwhelmingly high volatility because the price fluctuates significantly throughout the year, and the fluctuation tends to occur many times a year. I have.

High volatility has a profit margin, and there are many opportunities to fluctuate, so there is an advantage that it is easy to earn with XM.

POINT Gold can move more than 200 pips in an hour, so gold is a very attractive stock for scalping Forex traders who can earn money in a short time.

Why scalping is easy?

Because gold is highly volatile, it tends to be easy to earn large profit margins in a short period of time.

It is compatible with scalping, which repeats transactions in a short period of time, and it is possible to accumulate profits in a short period of time.

The reason why many forex traders also deal with gold trading is that the scalping method in forex can be used as it is, and if it goes well with XM, you will accumulate profits faster.

POINT The fact that it is easy to make a profit in a short time means that you may suffer a large loss in an instant, so when trading gold with XM, make sure to cut losses and accumulate profits in the same way as FX trading. prize.

Now let’s take a closer look at the timing of gold price fluctuations, which is important to traders.

The proper timing of Gold Trading

There are three time periods in which the price of gold moves:

• Early morning in Asian time

• When European time changes

• US index announcement

Timing 1: Asian time early morning

In the early morning of Asian time, it starts to move slowly, but it may fluctuate greatly due to the previous day’s reaction.

Timing 2: When European time changes

When the European market starts, there is a strong tendency to start moving all at once, in contrast to the gradual movement up to that point, and there are cases where trend formation begins.

Timing 3: US index announcement

Due to the large number of US traders that characterize gold, the greatest volatility occurs during US indicator releases and US market openings.

When trading with gold, be sure to trade with the above three timings in mind.

Next, let’s take a closer look at the features of GOLD.

FEATURES OF GOLD

GOLD has the following four characteristics.

Prices rise in proportion to demand for industrial goods and electrical appliances When the world economy becomes unstable, it is chosen as a risk avoidance destination USD and gold are correlated Long-term price increases are likely

Feature 1

of industrial products and electrical appliancesproportional to demandrise in price

Since Gold is used in many industrial products and electrical appliances, the value of gold increases as the demand for industrial products and electrical appliances increases.

points In order to know the price rise of gold, it is recommended to be aware of the performance and stock indices of companies that handle industrial products and electrical appliances.

Feature 2

When the world economy becomes unstableas a risk avoidance destinationTo be elected

In the event that the world economy becomes unstable, which is called “geopolitical risk,” gold is chosen as an asset to avoid risk.

It is often called “emergency gold” that “anxiety in the global economy = increased demand for gold (risk off)” often holds true, so when trading gold, be aware of geopolitical risks in particular. is important.

Of course, it is important to be aware of the above risks even in XM FX trading, but in the case of gold, fluctuations are extremely rapid, so be especially aware.

Feature 3

USD and goldcorrelated

Gold trading correlation image

Gold is strongly positioned as a safe asset, so when the value of gold rises, the price of the risk-on currency, the US dollar, often falls.

Conversely, when USD/JPY is in an upward trend (the value of the US dollar is high and the value of the Japanese yen is low), the price of gold tends to fall.

Therefore, by checking the USD/JPY chart, you can make a judgment about gold’s movement.

Feature 4

long term price increaseProbability is high

Image of gold trading rising in the long term

The total amount of gold that has been excavated all over the world so far is actually 180,000 tons, equivalent to three competition pools, and the unmined Gold remaining in the ground is 53,000. It’s called a ton.

Countries with large gold reserves in 2020 are as follows.

Let’s take a look at the countries that actually produce a lot of gold.

The top 5 countries with the highest gold output in 2020 are as follows.

(Source: US Geological Survey - Mineral commodity summaries)

In addition, it is used as a material for industrial products and electrical appliances, and it is difficult to imagine that the number of electronic devices will decrease in the future, so it is thought that the demand for gold will continue to increase.

Since the remaining amount to be mined is limited, it is highly likely that the price of gold, which is likely to become scarcer in the future, will rise in the long term.

In addition, central banks and public institutions around the world are accumulating gold holdings as foreign currency reserve assets.

Total holdings in 2021 are inflated for the first time in 31 years since 1990.

In contrast to the increasing presence of gold in reserve assets, the presence of the dollar has been steadily declining .

In the 50 years since then President Nixon announced in 1971 that the exchange of gold and the dollar would be suspended, the value of the dollar has decreased to about 1/50th of its original value. The money supply has increased about 30 times in 50 years.

POINT President Nixon’s announcement to stop the exchange of gold and the dollar triggered a change in the exchange market from a fixed exchange rate system based on the dollar that can be exchanged for gold to a floating exchange rate system. (Nixon Shock)

Currently, there is a view that gold can withstand turmoil in the world’s financial markets because it is not directly connected to the economy of any country. Emerging market central banks with weaker reserves are turning to gold to protect their assets.

As mentioned above, the number of traders who trade gold on XM is increasing year by year, partly because gold is a stock with future potential and partly because it is easy to predict.

Compared to FX currency, gold trading can increase assets in an overwhelmingly short time, but conversely, even when you suffer a loss, gold trading is fast, so let’s trade carefully.

So far, we have looked at the “Gold trading” in detail.

Finally, let’s take a look at the “summary” about gold trading at XM.

SUMMARY

At XM, it is possible to trade Gold with high leverage in the same way as FX.

Gold is also compatible with scalping, so it is recommended because there are many opportunities to make a big profit.

What you need to be careful about when trading with Gold is that the volatility is very high, so losses may increase at once.

Even though there is XM’s zero cut system, be sure to cut losses, manage risk properly, and trade gold with peace of mind.

However, for now gold trading still has the potential to generate greater profits with less capital than trading other Forex currencies.

Gold trading at XM is one of the most attractive trading styles.

If you have no experience trading gold at XM yet, let’s take this opportunity to start trading gold at XM.

And it’s important to remember that while gold trading on XM has its advantages, it also involves risks.

Traders should always exercise caution, conduct thorough research, and consider their risk tolerance before engaging in any trading activity.

Visit XM Official Website.