HOW TO TRADE GOLD

DailyFX Research Team

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What Makes Gold Precious? .................................................................................................................. 3

Unique Trait: An Alternative to Low Yield Currencies ........................................................................... 4

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Key Fundamental Factor: Interest Rates ............................................................................................... 5

Key Fundamental Triggers: Policy and Geopolitics .............................................................................. 6

Key Technical Strategies: Range and Momentum (Trend) .................................................................. 7

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Disclaimer..................................................................................................................................10

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HOW TO TRADE GOLD

DailyFX Research Team

What Makes Gold Precious?

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HOW TO TRADE GOLD

DailyFX Research Team

Unique Trait: An Alternative to Low Yield Currencies

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HOW TO TRADE GOLD

DailyFX Research Team

Key Fundamental Factor: Interest Rates

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HOW TO TRADE GOLD

DailyFX Research Team

Key Fundamental Triggers: Policy and Geopolitics

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HOW TO TRADE GOLD

DailyFX Research Team

Key Technical Strategies: Range and Momentum (Trend)

Gold prices tend to go through periods of quiet stagnation or explosive price action; rarely is the case
that we see the ‘steady as she goes’ tone emerge. To this end, instead of waiting around for
breakouts, traders may be better suited to follow range trading or momentum (trend) strategies.

When gold prices range, volatility tends to be low; when gold prices are trending, gold volatility tends
to be higher. It would be unusual to see gold volatility rise while gold prices are within a range; such
an occurrence would likely be a pre-cursor to a more significant directional move in gold prices outside
of the range. When gold prices start to experience momentum (trend), traders may want to use
indicators like MACD or Slow Stochastics to measure strength of trend; oversold readings are
indications of a strong bearish trend. Overbought readings are indications of a strong bullish trend.

Conversely, it would be unusual to see gold volatility fall while gold prices are trending; such an
occurrence would likely be a pre-cursor to a less significant directional move in gold prices, coalescing
into a range. When gold prices start to trade into a range, traders may want to use an indicator like
RSI that measures relative strength of recent price action. Oversold readings are indications of prices

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HOW TO TRADE GOLD

DailyFX Research Team

reaching the bottom of the recent range. Overbought readings are indications of prices reaching the
top of the recent range.

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HOW TO TRADE GOLD

DailyFX Research Team

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HOW TO TRADE GOLD

DailyFX Research Team

Disclaimer
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High Risk Investment

Trading commodities, such as gold, on margin carries a high level of risk, and may not be suitable for all investors. The high
degree of leverage can work against you as well as for you. Before deciding to trade gold you should carefully consider your
investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain losses in excess
of your initial investment. You should be aware of all the risks associated with gold trading, and seek advice from an
independent financial advisor if you have any doubts.

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