Trade Forex Trading

When Not to Trade Gold

There are times when you shouldn't trade XAUUSD because the market doesn't have enough activity and therefore becomes hard to predict. Not enough activity means there are fewer traders compared to other normal times. The times to avoid trading the market are:

  • News Time

Throughout the month, scheduled economic reports are released at various times, and these can be found ahead of time on a XAUUSD Calendar.

News falls into three groups: yellow, orange, and red. Each has its own effect level. Big economic news packs a punch on prices. It can spike the market both ways first. Then it picks a path. These moments bring high risk. Many folks hit stop-outs.

But, it's not just the news releases themselves that can change the trading market. Feelings and guesses about what the numbers will be can shift prices beforehand. Therefore, it's often best not to trade during news times.

Certain significant economic releases, such as Non-Farm Payrolls (NFP) and Interest Rate decisions, can induce extreme market volatility, leading to rapid and substantial price movements within mere seconds, which are challenging to trade.

Economic data can lead to significant speculation, resulting in considerable fluctuations in gold prices.

  • Weekends

A lot can happen over the weekend, and when the market opens, you can get a huge gap. This can cause a big hit to your account.

  • Market closing times- NY closing

A large number of trade positions are being closed or swapped at the end of the day. This might result in market fluctuations and unpredictability in gold values.

  • Asian Market

During the Asian session, trading volume drops and the market usually moves in a flat range of about 20 to 30 pips - it's tough to trade when prices barely move. Unless you're trading the JPY or AUD xauusd pairs, it's best to sit this session out.

  • Holidays

Abstain from trading during public holidays. Trading activity diminishes substantially as banks cease operations. When banks are closed, the volume of executed trades drops significantly, potentially leading to subdued market volatility.

During holidays such as Christmas and New Year, it is advisable for traders to refrain from trading and take a break for the entire week surrounding Christmas until banks resume operations on the following Monday. Traders can stay informed about bank holidays through an Economic Data Calendar, which typically provides this information.

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