L1.3 — Gold Volatility Profile: ATR, Wicks, and Typical Session Ranges

The Average True Range (ATR) on gold varies significantly by session. The Asian session typically produces 200-400 pip daily ATR (in gold pips — remember, these are $0.01 increments). London open expands this sharply. A full day's ATR on gold in a trending environment can be 1,500-2,000 gold pips. Understanding the typical ATR for the current market condition helps you set stop distances that reflect real market behaviour rather than arbitrary pip counts.

Gold produces longer wicks relative to candle bodies than most forex pairs. This is important for stop placement: a stop placed just below a structural level may get clipped by a gold wick that would not have triggered the same stop on EURUSD. Add buffer to structural stops on gold — minimum 20-30 gold pips beyond the structural level — and accept that the wider stop requires a proportionally wider target.

Track the ATR on your gold chart as a permanent display. When current ATR is significantly above the 14-period average, conditions are unusually volatile — reduce position size or increase stop buffer. When ATR is significantly below average, gold is in a compression phase and breakouts are likely imminent — but the direction cannot be predicted from ATR alone.