London-New York overlap in gold trading

The London-New York overlap is the period when European and US markets are both active, roughly from 8:00 a.m. New York time until London traders wind down around 11:30 a.m. to noon New York time. It includes the main US data releases at 8:30 a.m., the COMEX open and the US equity open at 9:30 a.m.

How it applies to gold trading

Liquidity and volatility peak in this window. Spreads on XAUUSD are typically at their tightest, and the largest hourly ranges of the day often occur here, especially on data days. For day traders it is the most active part of the day; for scalpers it offers the lowest costs.

The overlap also contains risk. US data can reverse the London move in seconds, and the 10 a.m. releases (such as ISM and consumer sentiment) add a second wave. The London close around 11 a.m. New York time can bring position squaring and the end of the day’s main move.

Worked example

Example (hypothetical numbers): gold’s average hourly range is $4 during the Asian session and $12 during the overlap. A scalper targeting $3 with a $0.25 spread gives up about 8% of the target in spread during the overlap. In the Asian session the spread may be $0.40, or 13% of the target, and a $3 move takes far longer to arrive.

A common mistake

Trading the overlap without checking the calendar. The 8:30 a.m. release lands right at its start.

See also: London open, New York session, London close, Killzone.

Frequently asked questions