The online Gold trading market is a 24 hours market; it opens on Sunday night (5 PM EST) and closes on Friday afternoon (4PM EST) - open 5 and a half days a week.
However, even though the gold market is open 24 hours a day, as a trader you need to realize that certain times of day are more suitable than others when it comes to trading XAUUSD in order to devise an effective and time efficient Gold trading strategy.
To maximize the number of trading opportunities during these market hours, it is important to be aware of the times when the online market is busiest. This is the time that most financial transactions activity occurs.
Even though there is no official open and close time during the week, the market trading day can be broken up into 3 major trading sessions - Tokyo, London and New York sessions.
However, although it seems not to be very important at the beginning, the right time to trade is one of the most crucial points required to be a successful trader.
The best time to trade Gold is when the market is most active and therefore has the biggest volume of financial transactions. A more active online market creates a good chance to make some profit while a calm and slow market is literally a waste of time - turn off your computer during this time and dont even bother trading XAUUSD at this time.
Not all the market times are suitable, that is because the volatility changes too much during the 24 hours market cycle. Below is a table outlining the schedule of the Trading Sessions. The time used is GMT 0.
Online Financial Market Trading Hours
These are the busiest trading times when it comes to trading financial instruments because these are the times when the major financial institutions and major banks in these cities are open for business. Because of the major financial transactions conducted by these major financial institutions the online financial trading markets also becomes very busy because of this large turnover of trades.
As a trader trading during this time is the best option because there is a lot of movement in the price of financial instruments.
The 3 major trading sessions are:
Asian Session Hours (Tokyo): 00:00 - 9:00 GMT
European Session Hours (London): 7:00 - 17:00 GMT
U.S. Session Hours (New York): 13:00 - 22:00 GMT
Trading Sessions Overlaps - Best Trading Times
There are hours when two trading sessions are overlapped:
London + Tokyo overlap - 7:00 - 9:00 GMT
New York + London overlap - 13:00 - 17:00 GMT
At these overlapping market hours you will find the highest volume of financial transactions and therefore more chances to make winning trades during these hours.
For example, the XAUUSD pair would give good trading results between 13:00 - 17:00 GMT when two market sessions of Europe and USA are open.
This means that the lion share of financial transactions is happening between the London session and US sessions. Naturally this is the best time to make profits trading the online markets.
The Gold prices moves a lot during the New York and London Sessions because Multinational companies, hedge funds, managed funds and banks are open for transacting financial instruments such as Gold metal, currencies and CFDs.
Multinationals will transact currencies during this time to facilitate international business transactions and commerce, hedge funds and managed funds will trade currencies, Gold metal, Oil and CFDs for investment purposes, banks on the other hand will exchange a lot of money on behalf of their clients, and also trade financial instruments such as currencies, Gold metal, Oil and CFDs for investment purposes or for speculative purposes.
Banks will also transact currency transactions on behalf of tourists wanting to travel around the globe or just anyone wanting to exchange money so as to buy something in another country or make some international transaction.
This makes the online market very liquid at this time and the high volume of financial transactions means that XAUUSD prices move a lot. At this time the Gold prices will generally move in particular direction and form a short term trend.
As a trader you also want to join in and trade when everyone is placing their orders because this is the time there is enough liquidity and many good opportunities to make money trading Gold, and because there is a lot of liquidity the market movement will generally be more predictable unlike when there is little liquidity and the price movement becomes unpredictable and the prices can move in a range bound with no particular direction.
Once you trade Gold for a while you will get to know that is easier to make money when the market is moving up or moving down when there is a trend, unlike when it is in a range. The market is likely to be trending during the busiest market times - which makes these times the best times for trading Gold.
Asian Session Characteristics:
- Least volatile of the three sessions
- Account for 15% of daily transaction turnover
- Typical 20 -30 pip moves
European Session Characteristics:
- Most volatile of the three sessions
- 35% of daily transaction volume
- Typical 90 -150 pip moves
US Session Characteristics:
- 2nd most volatile of the three sessions
- Accounts for 25% of daily turnover
- Focuses on US economic news
US and Europe Session Overlaps Characteristics:
Combines the two most volatile trading sessions
Accounts for 60% of total daily financial transactions turnover
Focuses on USA and European economic news
Fast moving Gold prices and XAUUSD pair trends in a particular direction
Typical 100 - 150 pip moves for major XAUUSD pair
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