Time to buy gold
Gold is not tied to a particular session. If the highest trading volumes and volatility on EUR/USD are observed in the European session, and the lowest – in the Asian session, the trading volumes of the pair XAU/USD do not depend on the session. Some sources cite analysis of statistics since 1975, which shows seasonal dependence of quotations: the lowest Au price is observed in March, the highest – in January and September.
Conclusion: the best time to buy gold is in March and the best time to sell is in September.
Technical Analysis Signals:
Crossing of moving averages with different periods. If the fast MA crosses the slow MA from bottom to top, it is a signal of the beginning of a bullish trend.
Signals of trend indicators ADX, Alligator, etc.
Volatility growth by ATR, determination of overbought and oversold levels by oscillators.
Breakdown of key resistance and support levels, Fibonacci levels. An example of gold trading on Forex by Fibonacci levels is considered in the review “What are Fibonacci levels”.
Testing graphical analysis figures: flag, triangle, flat channel
These are just a few examples of when it is time to buy gold or open short positions. In general, the application of technical analysis for XAU/USD is similar to working with currency pairs – you just need to adjust your trading system to the parameters of indicators.
Fundamental Analysis Signals:
Stagnation of the world economy or vice versa – economic growth. For example, the pandemic at the beginning of 2020 stopped the global economic development. Against the backdrop of expectations of a decline in global GDP and falling corporate profits, stock indices turned downwards, Au reached a new historical high. In August, after reports of a vaccine, investors became optimistic – indices recovered their spring losses and precious metals lost more than 10% of their value.
Macroeconomic statistics have a short-term impact – these are inflation statistics, industry forecasts and the like. The forecast is positive – investors are withdrawing money from protective assets.
A good time to buy gold is when the quotes have sagged – sooner or later they will turn upwards. The main question is whether you are willing to wait out this period.
Fundamental analysis signals do not always work. Example: the fall in gold prices in 2013 was the strongest in the last 30 years. The main reason for this was the economic problems in India, one of the largest consumers of the metal, as well as the economic crisis in Cyprus, which showed the risks of investing in government bonds. After these events, investors began to withdraw money from medium- and long-term ETF-funds in panic – this accelerated the fall in quotations. Instead of investing in protective assets, investors favored cash.
Is it worth buying gold now? If quotations have moved away from historical highs and the decline has stopped, it is worthwhile.