Global Gold Market Structure
As a store of value, gold has withstood the test of time despite being supplanted by fiat currency sometime during the 1930s. Gold is still in use as spending money in certain cultures to date. As an investment vehicle, the price of gold fluctuates moment-to-moment on the various gold markets scattered throughout the world. Those who need to know the most current price of gold have a number of sources that they can turn to get that information. Among them is the twice per day London Gold Fixing and the disparate markets for gold bullion found everywhere across the world. These markets serve as a price discovery mechanism from which a reliable value for gold can at any time be extracted. The content that follows concerns itself with the most significant of these markets, how they are structured and how they influence global trade and economics.
London Gold Markets and Agents
London is important as a global financial centre. Apart from the twice daily London gold price fixing, there are other financial markets on which one can buy or sell physical gold and other assets whose value is derived from the price of gold. Examples of such assets include gold mining shares, gold-backed paper assets (exchange traded funds and fixed-income instruments), gold certificates, options on gold and gold shares and gold for future delivery (forwards, futures and options).
The London Metal Exchange (LME) is a futures market that hosts the highest volume of gold futures trading in the world. The LME permits traders and investors to buy and sell contracts that call for the future delivery of gold three or more months in the future. The LME also allows for the trading in the “spot” or cash market for gold means that all such transactions are conducted at the most current price for gold. The LME exists to provide an additional avenue for price discovery while also offering a way for investors, traders and commercial interests to engage in hedging and risk transfer activities crucial to the risk management aspects of their core businesses.
The London Bullion Market Association (LBMA) is an intercontinental trade association that represents the interests of the major players within the London gold market. This includes the central banks that hold gold reserves, large mining and smelting companies, gold producers and refiners, and the futures market brokerage community. The mandate of the LBMA involves the maintenance of gold refining standards, documentation of significant gold trades, and the development of best trading practices for use within the precious metals industry and the financial markets. The LBMA is responsible for the maintenance of the “Good Delivery List” and the accreditation of new precious metals refiners along with the continuity of testing for listed refiners.
New York City
New York is another city that is important as world financial centre. In the U.S., most of the buying and selling of gold and its derivative products takes place in New York City. The dominant gold trading exchange in New York City is the New York Mercantile Exchange (NYMEX), home for trading of gold futures contracts, energy futures, and futures contracts for certain soft commodities. The NYMEX is split into two divisions, one of which — the COMEX (Commodity Exchange) is the principal market on which New York gold futures contracts are traded.
Asia and the Middle East
Located in the city of Shanghai, China, The Shanghai Metal Exchange (SHME) is a non-profit, self-regulating corporation that was created to bridge the gap in trading hours between the London Metal Exchange close and the New York Mercantile Exchange opening. Thus, the (SHME) enables a 24-hour market for gold trading to exist. The SHME is presently the largest precious metals exchange in China and the third largest overall in the world.
The Dubai Gold & Commodities Exchange otherwise known as the DGCX was established in 2006 and as the name suggests, it is located in Dubai, the United Arab Emirates. The exchange facilitates the highest volume of buying and selling of gold and derivative products in the Middle East. The DGCX is regulated by the Securities and Commodities Authority (SCA) of the United Arab Emirates which is a member of the International Organisation of Securities Commissions (IOSCO). The DGCX is situated in a time zone halfway between the gold markets in the Far East and the Europe. Attractive to many international investors, this time zone conveniently extends gold trading hours for global precious metals investors and hedgers while greatly facilitating global gold trading.
Global Gold Trading Hours
Unlike other commodity markets, the international gold market is a global market that operates on a 24hr basis, allowing investors to trade gold at any time. Here are some of world gold market trading hours -Greenwich Mean Time (GMT) and Local time.
Time of US-New York gold market
Opens at 8:20am and closes at 1:30pm (local time)
Opens at 13:20 GMT and closes at 18:30 GMT
Time of US-New York Electronic Trading
Opens at 6:00pm and closes at 5:15pm (local time)
Opens at 23:00 GMT and closes at 22:15 GMT
Time of UK – London gold market
Opens at 8:00am and closes at 5:00pm (local time)
Opens at 8:00 GMT and closes at 17:00 GMT
Time of China – Shanghai gold market
Opens at 9:00am and closes at 11:30am, then opens at 1:30pm and closes at 3:00pm (local time)
Opens at 1:00 GMT and closes at 3:30 GMT, then opens at 5:30 GMT and closes at 7:00 GMT
Time of Hong Kong gold market
Opens at 9:00am and closes at 12:30pm, then opens at 2:30pm and closes at 5:00pm (local time)
Opens at 1:00 GMT and closes at 4:30 GMT, then opens at 6:30 GMT and closes at 9:00 GMT
Time of Indonesia – Jakarta gold market
Opens at 9:30am and closes at 5:30pm (local time)
Opens at 2:30 GMT and closes at 10:30 GMT
Time of India – Mumbai gold market
Opens at 10:00am and closes at 11:30pm (local time)
Opens at 4:30 GMT and closes at 18:00 GMT
Time of Turkey – Istanbul gold market
Opens at 9:45am and closes at 5:30pm, then opens at 5:45pm and closes at 9:40am (local time)
Opens at 7:45 GMT and closes at 15:30 GMT, then opens at 15:45 GMT and closes at 7:40 GMT
Time of Japan – Tokyo gold market
Opens at 9:00am and closes at 3:30pm, then opens at 5:00pm and closes at 11:00pm (local time)
Opens at 00:00 GMT and closes at 6:30 GMT, then opens at 8:00 GMT and closes at 14:00 GMT
Time of United Arab Emirates – Dubai gold market
Dubai opens at 8:30am – closes at 11:30am (local time)
Dubai opens at 0430 GMT – closes at 0730 GMT
Time of Pakistan – Islamabad gold market
Opens at 10:00am and closes at 6:00pm (local time)
Opens at 5:00 GMT and closes at 13:00 GMT
Time of Brazil – Sao Paulo gold market
Brazil opens at 10:00am and closes at 5:00pm, then opens at 5:45pm and closes at 7:00pm (local time)
Brazil opens at 1300 GMT and closes at 2000 GMT, then opens at 2045 GMT and closes at 2200 GMT