HERE IS WHEN YOU MIGHT WANT TO CONSIDER TRADING GOLD
Best Time to Trade XAUUSD in Nigeria
Nigeria is gradually growing into one of the most active online trading hubs in the world. With a young, tech-savvy population, the number of traders in this country continues to grow. One of the most popular assets for online investors to trade is gold. Naturally, gold is one of the most heavily traded precious metals in Nigeria. But when is the best time to trade the XAUUSD pair in Nigeria? Remember that strategic timing can significantly impact your trading experience. In this article, we will explore the best time to trade XAUUSD in Nigeria.
Understanding Trading of XAUUSD
XAUUSD represents the price of gold quoted in U.S. dollars. Gold is traded globally, and its price is influenced by a variety of factors including economic data, geopolitical events, and market sentiment. Generally, gold is viewed as a safe haven during economic turmoil or geopolitical uncertainty. When stocks and other investments get shaky, gold tends to hold its value or even increase. As such, it is widely popular among traders.
Moreover, Gold has a long history of retaining its value over time. This is because there's a finite amount of gold, making it a scarce and valuable commodity. This makes it a great asset to hedge against currency inflation. These are the two main reasons why gold is very popular among investors. However, there are many other reasons as to why traders love this asset. But what is the best time for Nigerians to trade gold? Let’s take a look.
Nigeria is gradually growing into one of the most active online trading hubs in the world. With a young, tech-savvy population, the number of traders in this country continues to grow. One of the most popular assets for online investors to trade is gold. Naturally, gold is one of the most heavily traded precious metals in Nigeria. But when is the best time to trade the XAUUSD pair in Nigeria? Remember that strategic timing can significantly impact your trading experience. In this article, we will explore the best time to trade XAUUSD in Nigeria.
Understanding Trading of XAUUSD
XAUUSD represents the price of gold quoted in U.S. dollars. Gold is traded globally, and its price is influenced by a variety of factors including economic data, geopolitical events, and market sentiment. Generally, gold is viewed as a safe haven during economic turmoil or geopolitical uncertainty. When stocks and other investments get shaky, gold tends to hold its value or even increase. As such, it is widely popular among traders.
Moreover, Gold has a long history of retaining its value over time. This is because there's a finite amount of gold, making it a scarce and valuable commodity. This makes it a great asset to hedge against currency inflation. These are the two main reasons why gold is very popular among investors. However, there are many other reasons as to why traders love this asset. But what is the best time for Nigerians to trade gold? Let’s take a look.
The Best Time to Trade XAUUSD in Nigeria
To understand the best time to trade gold in Nigeria, it's important to first understand forex trading sessions. Let’s take a look at the various global trading sessions and the optimal time for gold traders in Nigeria to invest.
Sydney Session (11:00 PM and 7:00 AM WAT)
The Sydney session kicks off the global trading day for XAUUSD. Due to fewer participants compared to later sessions, the Sydney session typically experiences lower liquidity. This translates to potentially wider spreads and less pronounced price movements in XAUUSD.
Tokyo Session (1:00 AM and 10:00 AM WAT)
Compared to London and New York, the Tokyo session has a lower trading volume. This translates to potentially wider spreads and less pronounced price movements. However, the Tokyo session shouldn't be entirely discounted. Major economic news releases from China, Japan, or other Asian economies can still trigger significant price movements in XAUUSD.
London Session (9:00 AM to 6:00 PM WAT)
During the London session, the market sees increased participation from European traders. This session often sets the tone for the rest of the day. It is characterised by significant news and data releases from Europe influencing gold prices. Overlap with the New York session often leads to increased liquidity and volatility.
New York Session (3:00 PM to 11:00 AM WAT)
The New York session brings in U.S. traders and is characterised by high volatility, especially in the early hours. The overlap with the London session provides the best trading opportunities, with both European and U.S. traders actively participating. This translates to tighter spreads and more pronounced price movements.
Most of the countries in the world follow the Daylight Saving Time and in Nigeria, we don’t. We have to deduct one hour from the opening and closing times of each trading session during the Daylight Saving Time.
Before we get to the final analysis of what is the best timeframe to trade XAAUSD in Nigeria, let's take a look at two of the best forex brokers that support trading gold in Nigeria.
Best XAUUSD Brokers in Nigeria
HFM
HFM (formerly HotForex) is a popular Forex and CFDs broker that allows Nigerian traders to trade gold against the US Dollar (XAUUSD). Gold is also available to trade against the Euro (XAUEUR) on this broker site. Notably, gold is available to trade from Mondays at 1:05:00 GMT+2 to Fridays at 23:57:59 GMT +2 with no daily breaks. The spreads on the XAUUSD pair are fairly low on the HFM broker site on all the accounts.
The spreads are as low as 0.25 on the premium and the cent accounts. On the pro account, the spreads start from as low as 0.16 and on the top-up bonus account they are as low as 0.26. Finally, the zero account avails the XAUUSD pair with spreads as low as 0.03.
This broker also offers traders a deep collection of market products to trade alongside gold. These include CFDs on forex, metals, energies, indices, stocks, commodities, bonds, ETFs and cryptocurrencies. In total, there are over 1,000 different market instruments on this broker site. The trading platforms available to use include MetaTrader 4, MetaTrader 5, and the HFM Platform. Finally, this broker is under the regulation of the CMA in Kenya, the FSCA in South Africa, the CySEC, the FCA, and the FSC, among others.
Exness
Exness can be an attractive option for Nigerian traders looking to trade gold (XAUUSD). Trading gold on this broker site is available from Sunday 22:05 GMT to Friday 20:58 GMT with daily breaks between 20:58 GMT and 22:01 GMT. Notably, the broker offers tight spreads on XAUUSD which depend on the account that a client uses. On the standard and the standard cent accounts, the spreads on gold start from as low as 2.0 (=20 pips) with no commission required.
In contrast, the zero account features a spread from as low as 0.0 pips on this pair with a commission of $8 per side per lot charged. Further, the raw spread account features a spread as low as 0.63 on this pair with a commission of $3.5 per side per lot. Finally, the pro account features spreads as low as 1.25 with no commission paid. Interestingly, Exness offers all traders who trade XAAUSD the Extended Swap-free feature, which means there are no overnight fees on this asset. As such this is the perfect option for long-term investors who are looking to stay in their XAAUUSD position for a longer time period.
Notably, gold is traded alongside a plethora of other assets on this broker site. These include CFDs on forex, indices, other commodities, stocks, and cryptocurrencies. The trading platforms available to use include MetaTrader 4, MetaTrader 5, and Exness Trader. On regulations, this broker operates under the supervision of the FSCA in South Africa, the CMA in Kenya, the FCA in the UK, and the CySEC in Cyprus, among others.
Optimal Trading Hours for XAU/USD in Nigeria
Given the characteristics of the different trading sessions, the optimal times to trade XAUUSD in Nigeria are during the London and New York sessions between 3:00 PM WAT and 6:00 PM WAT. Specifically, the period when these sessions overlap is ideal due to the heightened volatility and liquidity. Traders in Nigeria benefit from the increased liquidity of these major sessions while trading during convenient daylight hours. The high liquidity is particularly important for short-term traders aiming for quick profits on smaller price movements.
Nonetheless, each trader has a specific trading strategy and risk tolerance level. Some trading sessions are characterised by high liquidity but the volatility is usually very high. While high volatility offers more potential profit, it also carries greater risk. Outside these peak hours, the market tends to be calmer, with smaller price swings. This can be suitable for longer-term position trading strategies focused on fundamentals rather than short-term price movements.
For Nigerian traders looking to maximise their XAUUSD trading experience, timing is crucial. The sweet spot lies during the overlap of the London and New York sessions (3:00 PM WAT to 6:00 PM WAT). This timeframe boasts the highest liquidity and volatility. However, remember that the ideal trading time depends on your personal strategy and risk tolerance.
If you prefer calmer markets with smaller price swings, trading outside peak hours might be more suitable. Regardless of your approach, Nigerian traders have access to reputable brokers like Exness and HFM to facilitate their XAUUSD trades. These brokers offer competitive spreads and a variety of trading platforms to suit trader needs. So, conduct your research, understand the market conditions, and choose the time that aligns best with your trading goals.