Explainers Archives - Stock Surge

“SPAC Attack! A detailed breakdown of how U.S. SPACs work, from IPO structure to the de-SPAC process, redemptions, SEC rules, cash trust mechanics, sponsor incentives, and market trends. Clear, direct analysis for investors.”

SPAC Attack! How U.S. SPACs Work and Why They Continue to Reshape Capital Markets

December 2, 2025

The Structure Behind a SPAC Special Purpose Acquisition Companies, or SPACs, remain an active route for listing private companies in […]

Gold trades around the clock — but not all hours are equal. Beneath its steady global price, the metal moves through deep liquidity shifts that explain why traders often see sharp reversals between the U.S., Asian, and European sessions. Understanding these transitions is critical for anyone trading gold futures, CFDs, or ETFs. The Scale of the Imbalance Gold’s trading power base lies in New York. The COMEX exchange handles between 250,000 and 350,000 contracts per day, equivalent to roughly 25–35 million ounces — around 60–70% of total global turnover. It’s the market’s deepest pool, characterized by tight spreads often below ten cents and dominated by algorithmic and institutional flow. Asia’s markets, by comparison, are far smaller. The Shanghai Gold Exchange (SGE) handles around 15–25 tonnes a day, roughly 10–15% of world volume, and is primarily physical and retail-oriented. Japan’s Tokyo Commodity Exchange (TOCOM) trades 50,000–70,000 contracts a day — just 7–10% of COMEX’s activity. Hong Kong and Singapore OTC desks add another 3–8% of global flow, often reacting to rather than setting price direction. When COMEX shuts for the night and Asia opens, global gold liquidity drops by as much as 60–75%. That gap sets the stage for volatility and often dictates where daily trends begin to unravel. Depth, Spreads, and the “Air Pocket” Effect During U.S. hours, COMEX often shows $5–8 million of visible depth per tick within five price levels. In early Asian trading, that depth can shrink to less than $1 million per tick. Bid–ask spreads widen from 5–10 cents to as much as 40–80 cents. This thinning of order books creates “air pockets” in prices. Even modest market orders or local headlines can trigger exaggerated moves, slicing through stop levels and making reversals look abrupt and erratic. For intraday traders, these conditions can amplify both risk and reward. Who Trades When The behavior of traders across regions also magnifies these swings. U.S. participants are largely institutional: macro hedge funds, commodity ETFs, and systematic algorithms. Asian flows lean toward physical and retail: jewelers, refineries, and sovereign buyers alongside leveraged margin traders in Hong Kong, Singapore, and Japan. As a result, Asia often books profits rather than extends U.S. trends. When physical buyers step back and retail traders take profits, momentum stalls — until London reopens and reasserts direction. Liquidity Windows (AEST) Time (AEST) Session Relative Liquidity Typical Behavior 5–7 a.m. Late New York Peak Macro data flow, heavy futures activity 9–11 a.m. Asia open 25–35% of NY depth Thin conditions, frequent reversals 5–7 p.m. London open 60–70% restored Trend resets, arbitrage flows resume Between 9 a.m. and 5 p.m. AEST the market operates in its lowest liquidity window. In that period, a 0.2% move in New York can balloon to 0.8% in Asia. Overlapping Liquidity Cycles Gold follows three overlapping liquidity cycles through the day: London–New York overlap (midnight–4 a.m. AEST): The most active phase. Institutional and ETF hedging drive direction. Asia-only hours (9 a.m.–4 p.m. AEST): Liquidity trough. Reversals and consolidations dominate. London open (5–7 p.m. AEST): Arbitrage and volume surge restore price continuity. This rhythm explains the recurring volatility bursts traders see between sessions — particularly those 9–10 a.m. and 5–6 p.m. AEST inflection points. Liquidity and Volatility: An Inverse Relationship Liquidity and volatility rarely coexist. When depth is low, small trades move the price further, producing high volatility per dollar traded. When liquidity is high, even large flows are absorbed smoothly. That’s why the most lucrative trading windows — such as Asia mid-morning — are also the most perilous. Order Flow and Asymmetry The COMEX market is dominated by macro and hedging flows around major data events like CPI or Federal Reserve meetings. By contrast, SGE and TOCOM activity often moves against those trends, reflecting jewelry demand or physical arbitrage opportunities. This asymmetry leads to the well-known “trend fade” effect: Asia unwinds what New York built, only for London to later reassert the prevailing macro direction. How the Layers Interact Gold’s liquidity stack has four tiers: London spot OTC — Deepest and most stable, dominated by banks and ETFs. New York COMEX futures — The benchmark; highly leveraged and transparent. Shanghai physical — Driven by currency and local demand. Asia-Pacific CFDs and retail — Thin and volatile. When COMEX closes, the pricing “anchor” weakens, and thin derivative markets can swing wider. Arbitrage between these layers breaks down until London or New York reopen. Arbitrage and Latency Gaps Cross-exchange arbitrage usually keeps global gold prices aligned, but low liquidity widens latency and hedging costs. During Asia hours, gold can drift $2–5 away from theoretical parity with COMEX. When London opens, arbitrageurs step in, snapping the market back — often causing sharp retracements. Seasonal and Weekly Liquidity Effects Liquidity also follows weekly and calendar rhythms. Mondays and Fridays are lighter, while COMEX options expiry and ETF rebalancing drive bursts midweek. At month-end, central banks and funds adjust hedges, producing predictable spikes in turnover. And during Chinese holidays, such as Golden Week or Lunar New Year, Asian liquidity collapses — often triggering global volatility spikes. The “Liquidity Gravity” Phenomenon When liquidity thins, prices tend to drift toward zones of high resting orders — prior session highs and lows, option strikes, and VWAPs. These areas act like magnets, pulling price back once liquidity returns. It’s one reason gold often retraces after an exaggerated Asian move. Gold’s price may appear continuous, but its liquidity is not. The 24-hour cycle hides dramatic shifts in depth, participation, and behavior. For traders, those transitions explain the frequent 9 a.m. and 5 p.m. AEST trend flips — points when the world’s largest gold markets hand the baton from one region to another. Understanding that liquidity rhythm is less about predicting price and more about anticipating when the market is most — or least — capable of absorbing it.

Explainers, Resources

Inside Gold’s Liquidity Gaps: Why Trends Can Flip Between Sessions

November 5, 2025

Gold trades around the clock — but not all hours are equal. Beneath its steady global price, the metal moves

Crypto staking has gone mainstream in 2025, offering investors passive income through proof-of-stake blockchains like Ethereum, Cardano, and Solana. Learn how staking works, key platforms, rewards, risks, and why institutions are entering the space.

Crypto, Explainers

Crypto for Passive Returns? Staking Becomes a Mainstream Yield Strategy

July 14, 2025

The global cryptocurrency market has reached US$3.66 trillion. With more than 9500 digital assets traded across 250+ exchanges, crypto has

Rare Earth explorers are increasingly drawn to California mining opportunities near the Mountain Pass rare earth hub. With companies like Banyan (ASX:BMM), Dateline (ASX:DTR), and Locksley (ASX:LKY) securing landholdings, understanding California’s mine permitting process is essential. Mining in California

Explainers, Resources

California Mining Approvals Demystified: The Road to Rare Earth Development for ASX Miners

July 7, 2025

Australia’s ASX-listed explorers are increasingly turning their attention to California, drawn by the strategic significance of rare earths and proximity

MP Materials (NYSE: MP) leads U.S. rare earths. ASX juniors DTR.ax & LKY.ax explore next door to Mountain Pass, eyeing strategic tailwinds.

Explainers, Resources

The Mountain Pass Mine and the ASX Juniors Next Door

May 27, 2025

MP Materials (NYSE: MP), the Western Hemisphere’s top rare earths producer, has turned its Mojave Desert “Mountain Pass Mine” into

Explainers, Resources

Gallium: Everything to Know About the Metal Powering the AI Arms Race

May 21, 2025

Gallium (element Ga) isn’t a name most retail investors recognize. But this soft, silvery metal is quietly becoming essential in

Gold and bitcoin - which asset class to choose

Crypto, Explainers

Gold vs Bitcoin: Which Alternative Asset for Me?

May 13, 2025

In today’s uncertain economic climate, investors are increasingly turning to alternative assets like gold and Bitcoin to hedge against inflation,

Explainers, Resources

All 17 Rare Earth Elements – Ranked

May 9, 2025

Global investment in rare earth elements (REEs) is rapidly accelerating outside of China as countries seek to secure critical mineral

Explainers

Additive Manufacturing Moves Beyond Prototyping as Industry Embraces Advanced 3D Printing

May 8, 2025

Additive manufacturing (AM), long associated with rapid prototyping and plastic components, is undergoing a major transformation. Thanks to breakthroughs in

Exterior sign of the U.S. Food and Drug Administration (FDA) headquarters, symbolizing regulatory authority over drug approvals and biotech development.

Explainers, Health

FDA Fast Lanes: Why Expedited Designations Matter for Biotech Investors

May 5, 2025

Biotech investing is a game of high stakes and even higher uncertainty. But when the US FDA (Food and Drug