XAUUSD is the price of one troy ounce of gold quoted in US dollars. XAU is the code for gold and USD is the dollar. Most retail traders access it as a CFD or spot contract, not physical metal. A standard lot is 100 ounces, so a $1 move is worth about $100 per lot. Gold is more volatile than major pairs.
What XAUUSD means
XAU is the international code for one troy ounce of gold, and USD is the US dollar. XAUUSD is the number of dollars it takes to buy one ounce. The logic is the same as a currency pair, with gold in the base position.
When XAUUSD rises, gold is strengthening against the dollar. When it falls, the dollar is buying more gold. For the US position, see can you trade XAUUSD in the US.
How gold trading works
Very few retail traders take delivery of physical bars. They trade gold as a CFD or spot contract through a broker. They speculate on the price with leverage and never own metal.
This is why gold sits beside forex on most platforms. Mechanically, trading XAUUSD feels like trading a currency pair, even though gold is a commodity with its own drivers.
Contract size and point value
The standard contract is 100 troy ounces. A one-dollar move in the gold price, say 2000.00 to 2001.00, is worth about:
- $100 per standard lot
- $10 per mini lot (10 oz)
- $1 per micro lot (1 oz)
Be careful with the words pip and point on gold. Brokers define them inconsistently. Some count a $0.10 move, some $0.01. Work in dollars per lot per one-dollar move, or read the value from a position size calculator.
Why gold is not just another pair
Gold is a commodity and a safe-haven asset. It is driven by real interest rates, the dollar and risk sentiment, not by two countries' monetary policy. It can trend hard for weeks and also whip violently around news.
Gold is typically more volatile than pairs like EUR/USD, and its daily ranges are larger. Treating XAUUSD like a quiet major is a common and expensive beginner error.
Spreads and costs
Gold usually carries a spread wider than the tightest majors. It can widen sharply around news and in thin hours. Spread plus any commission is a real cost on entry, and it matters more the shorter your holding time.
Overnight positions may also incur a financing charge. None of this is a reason to avoid gold. Price it in, and favour the liquid hours when the spread is tightest.
Is gold good for beginners?
The mechanics are beginner-friendly. The volatility is not. A position sized like a EUR/USD trade can lose far more than you expect. If you trade gold early, use wider structural stops, smaller position sizes and the same 1% risk cap as everything else.
Questions
How much is one lot of gold worth?
A standard lot is 100 troy ounces. A $1 move is worth about $100 per standard lot, $10 per mini lot and $1 per micro lot.
What is a pip on gold?
It varies by broker. Some define it as a $0.10 move, others as $0.01. Think in dollars per lot per one-dollar move instead.
Is trading gold the same as trading forex?
Mechanically it is similar. But gold is a commodity driven by real yields, the dollar and risk sentiment, and it is usually more volatile than the major pairs.
70–80% of retail investor accounts lose money trading CFDs. This page is education, not advice. All trade examples are constructed composites.
