As investors are more eager for a stable investment that can resist inflation, avoid market risks and other geopolitics risks, gold has become more and more popular in the past few years.

When it comes to gold investment products, XAU/USD is the most familiar. Compared with the past, the threshold for investing in gold has been greatly reduced, and it is easier for investors to add gold to their investment portfolios.

As the COVID-19 pandemic shakes the global economy, foreign governments and funds are investing more money in gold to prevent losses caused by inflation. In order to combat the economic blow from the epidemic, a series of quantitative easing measures will weaken the global currencies, and the precious value of gold is even more visible.

The reason why gold is precious is mainly because its global supply is relatively fixed, and it will not increase circulation like the government can print money at will. If you are preparing to invest in gold, please keep the following nine trading tips in mind.

1. Intraday trading during New York time

Gold is a nearly 24-hour market, but liquidity peaks usually occur during New York trading hours. Whether you should trade during the New York trading hours depends on your trading goals.

The New York trading hours are accompanied by high liquidity, which gives the market enough momentum to move towards the goal. However, trading hours outside of New York are more suitable for certain range trading strategies.

2. Compare previous highs and lows

The most commonly used strategy is to find buying or selling opportunities between previous highs and lows. For example, a trader can open a position when gold is rising and use the previous high as the selling price, and vice versa.

3. Geopolitical analysis

When political or economic uncertainty raises concerns about currency prices, gold often becomes your investment safe haven.

4. Use symmetrical triangles for analysis

The symmetrical triangle is a simple chart pattern, which implies that the price is consolidating and gaining momentum to break through. The characteristic of a symmetrical triangle is that two trend lines travel at similar slopes but in opposite directions. As consolidation occurs, price movements become more tense, creating potential trading opportunities in the event of a breakthrough.

Some traders use the symmetrical triangle pattern together with other technical indicators, such as liquidity or relative strength index. When other indicators show a potential price breakout, a symmetrical triangle can be further confirmed.

5. Watch out for the actions of the central bank

When central banks anticipate fluctuations in certain currencies, they tend to buy gold as a hedge. For example, China and Russia have recently made headlines due to their large investments in gold, reflecting their concerns about the future prices of major global currencies such as the U.S. dollar and the euro.

6. Track real interest rates

Gold has a high degree of correlation with real interest rates. The price of gold rises as interest rates fall and falls as interest rates rise.

7. Moving average crossover

The price of gold often fluctuates within a range, and they cause different moving averages to cross on the chart. Whenever the short-term moving average crosses the long-term moving average, many traders will buy. For example, if the 20-day moving average crosses the 50-day moving average price point, this will imply a buying opportunity.

8. Pay attention to changes in gold production

In the past few years, the demand for gold has remained strong, but the overall mining output has only slightly increased. It is expected that the mining cost of gold will continue to rise in the future, which may continue to support gold prices.

Disclaimer:
The information provided here is for general information and educational purposes only. It is not intended and should not be interpreted as constituting investment advice.