Been trading forex for a while but never touched gold. The spread seems wider than major pairs, and I’m not sure how it moves compared to currencies.
What should I know before jumping in? Is it different from regular forex or pretty similar once you get the hang of it?
Gold’s correlation with the dollar is huge - when USD weakens, gold usually jumps. I learned this the hard way when I ignored dollar index signals early on.
The sessions matter more than with forex. London open can be wild for gold, especially around 8:30 AM GMT when UK data drops. I’ve seen 20+ pip moves in seconds.
One thing that caught me off guard was how gold reacts to bond yields. Rising yields often pressure gold down since it doesn’t pay interest. Started tracking 10-year Treasury yields and it helped my timing.
Also watch your overnight exposure. Gold loves to gap on Asian open when something happens in the US after market close.
Your broker choice matters more with gold than forex. Some brokers widen spreads to 5-10 pips during news while others keep it tight around 2-3 pips. Test execution during volatile sessions before going live. Gold respects technical levels better than most currency pairs. Support and resistance zones often hold for weeks. Use this to your advantage with limit orders rather than chasing breakouts. Position sizing is critical. Gold can move 50 pips in minutes during dollar moves or Fed speeches. Cut your usual forex position size in half until you understand its rhythm.
Gold tends to gap more overnight and the spreads can eat into profits quickly if you’re not careful with position sizing.
Treat it more like an index than a currency pair. It reacts heavily to inflation news, dollar strength, and geopolitical events.
Start smaller than your usual forex positions until you get a feel for how volatile it can be during news releases.
Volatility spikes around Fed meetings and inflation data releases. Watch the sessions closely and maybe check out some live analysis.
Helps seeing how pros read the gold charts in real time.
Gold moves faster than forex and news hits harder.