The gold price on your platform is not set by your broker, and it is not set in one place. It emerges from several overlapping markets — London physical trading, New York futures, and ETF flows — each with different participants and different hours. Knowing which one is driving at a given time explains a good deal of gold’s behaviour.
The three markets that matter
London OTC — the physical market
The largest gold market by volume is over-the-counter trading centred in London, where banks, refiners, miners and institutions trade physical gold and unallocated gold accounts.
This is where the spot price originates. It has no central exchange — prices come from dealers quoting to each other.
The London fix, now an electronic auction conducted twice daily, establishes a benchmark price used for contract settlement across the industry. These auction times occasionally produce short bursts of activity.
COMEX — the futures market
Gold futures trade on COMEX, part of the CME group in New York. The standard contract is 100 troy ounces.
Futures matter for retail traders for three reasons:
Real volume data. Unlike spot forex, futures volume is reported accurately. Traders who want genuine volume information for gold look here.
Positioning data. The COT report covers gold futures, showing how speculators and commercials are positioned.
Price leadership. During US hours, futures activity frequently drives spot pricing rather than the reverse.
ETFs — investment demand
Gold-backed exchange traded funds hold physical gold and issue shares against it. When investors buy shares, the fund buys gold; when they sell, it sells.
ETF holdings are published daily and serve as a reasonable proxy for institutional investment appetite. Sustained inflows indicate accumulation; sustained outflows indicate the reverse.
This moves slowly and is context rather than a trading signal.
What your broker actually quotes
Retail gold trading is typically a CFD or spot contract referencing the underlying spot price.
Your broker sources pricing from liquidity providers connected to the OTC market, adds a spread, and quotes you. You are not trading on COMEX and you do not own gold.
Three practical consequences.
Prices vary slightly between brokers. Different liquidity sources produce small differences, more noticeable on gold than on major currency pairs.
Your broker sets the specifications. Contract size, pip definition, margin requirement and trading hours are your broker’s choices, not market standards.
Execution quality varies more than on FX. Gold’s volatility and wider spreads make broker quality more visible. Slippage that is negligible on EUR/USD can be significant on gold.
This is one reason broker selection matters more for gold traders — worth checking regulatory status through the broker licence checker before committing, alongside comparing spreads on gold specifically rather than on the headline EUR/USD figure brokers advertise.
Trading hours
Gold trades nearly continuously during the week, with a daily break when the futures market closes for maintenance.
Typical schedule, though your broker’s hours may differ:
Opens Sunday evening (US time)
Closes Friday evening (US time)
Break Approximately one hour daily
around the futures close
The daily break matters practically. Spreads widen substantially around it, and positions held through are exposed to a gap when trading resumes.
Check your broker’s exact hours and note the break time. Placing a trade minutes before it is avoidable.
Who sets the price at different times
Gold’s character changes through the day depending on which participants are active.
| Period | Dominant participants | Character |
|---|---|---|
| Asian hours | Physical demand, Asian institutions | Quieter, range-bound |
| London open | OTC dealers, European institutions | Activity increases |
| London–NY overlap | Everyone | Highest volatility |
| US afternoon | Futures traders | Moderate, can trend |
The overlap period carries the most movement and the most opportunity. It also carries the most risk for anyone sized incorrectly.
This is covered fully in the sessions lesson later in this section.
Central bank holdings
Central banks collectively hold a substantial share of above-ground gold as part of their foreign reserves.
Their behaviour differs fundamentally from other participants: they buy on policy mandates over years, largely insensitive to price. A reserve manager instructed to increase gold allocation buys regardless of whether gold is at a technical resistance level.
Sustained official sector accumulation provides a structural demand floor. This does not help you time entries, but it explains why gold sometimes finds support where pure speculative logic would not predict it.
Holdings data is published with a delay, which makes it context rather than signal.
Why supply barely matters
A point that distinguishes gold from other commodities and is worth understanding properly.
Nearly all gold ever mined still exists. It does not get consumed the way oil or wheat does — it is recycled, stored, worn and held. The above-ground stock dwarfs annual mine production many times over.
The consequence: a mine closure or a production increase changes the total available stock marginally. Price is determined almost entirely by the willingness of existing holders to sell and new buyers to buy.
This is why supply-side news moves gold far less than it would move oil, and why gold analysis focuses on demand drivers — real rates, risk appetite, investment flows — rather than production.
Reading positioning data
The COT report, covering gold futures, offers genuine positioning information.
It breaks participants into categories, with the useful distinction being between commercials — miners and industrial users hedging real exposure — and large speculators, who are taking directional bets.
Extreme speculative positioning occasionally signals crowding. When speculators are heavily long, the marginal buyer has already bought, which can precede a reversal.
Two limitations keep this as context rather than a signal: it is published with a several-day delay, and extremes can persist far longer than seems reasonable.
What this means practically
Know your broker’s specifications. They are broker-specific, not market standards.
Note the daily break. Avoid trading into it.
Expect session character to change. Asian ranges and overlap volatility are different environments.
Treat positioning and ETF data as background. Useful for understanding, not for timing.
Compare gold spreads specifically when choosing a broker. The advertised EUR/USD spread tells you nothing about gold execution.
What to do next
The next lesson covers contract specifications in detail — pip value, lot size, margin and swap on gold, with the calculations you need before sizing a position.
Frequently asked questions
Where is the gold price actually set?
Primarily in the London over-the-counter market, where banks and institutions trade physical gold, with COMEX futures in New York frequently leading during US hours. There is no single exchange that sets a global gold price.
Am I buying real gold when I trade XAU/USD?
No. Retail gold trading is typically a cash-settled CFD or spot contract referencing the underlying price. Your broker sources pricing from liquidity providers, adds a spread, and quotes you.
Why do gold prices differ between brokers?
Because brokers source pricing from different liquidity providers and set their own spreads and specifications. The differences are small but more noticeable on gold than on major currency pairs.
What are gold trading hours?
Nearly continuous from Sunday evening to Friday evening US time, with roughly a one-hour daily break around the futures market close. Spreads widen substantially around that break, and your broker’s exact hours may differ.
Does gold mine production affect the price?
Very little. Nearly all gold ever mined still exists, so the above-ground stock dwarfs annual production. Price is determined by the willingness of existing holders to sell rather than by new supply.
Is the COT report useful for gold?
As context rather than timing. It shows genuine positioning in gold futures, and extreme speculative readings can indicate crowding. It is published with a several-day delay and extremes often persist longer than expected.