VWAP in gold trading
VWAP is the volume-weighted average price of a session; gold day traders use it as a fair-value line, buying pullbacks above it and selling rallies below it.
Also called Volume-weighted average price, Session VWAP, Anchored VWAP
VWAP (volume-weighted average price) is the average price of a session weighted by the volume traded at each price. It resets at the session open and is the benchmark institutional desks use to judge execution quality. Price above VWAP means the average participant today is in profit on longs; below means the opposite. Anchored VWAP applies the same calculation from a chosen bar, such as a swing low or a news candle.
How it applies to gold trading
Spot XAUUSD has no central exchange, so platform VWAP is built on tick volume, which is a proxy. Futures traders use the COMEX GC VWAP with real volume. Either way, VWAP on gold behaves as an intraday mean: during the New York session, pullbacks to a rising VWAP are a common continuation entry, and a failure to reclaim VWAP after a drop suggests sellers are in control. On trending days price can stay on one side of VWAP all session; on ranging days it oscillates around it.
Standard deviation bands around VWAP serve the same role as Bollinger Bands for intraday extremes.
The VWAP lesson covers the session reset, anchoring to the London and New York opens, and how to read a day in which price fails repeatedly to reclaim the line.
A common mistake
Comparing VWAP values between platforms. Different tick-volume feeds produce different lines; the concept transfers, the exact level does not.
See also: Volume profile, Moving average, Tick, New York session.
Frequently asked questions
Does VWAP work on spot gold without real volume?
It works as a tick-volume-weighted mean, which behaves similarly in practice. For precise institutional-style VWAP, use COMEX futures data.
When does VWAP reset for gold?
Session VWAP resets at the daily session open, which on most platforms is the reopen after the 5 p.m. New York break. Some traders anchor it to the London or New York open instead.