What Is XAUUSD? The Complete Guide to Trading Gold

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XAUUSD in one sentence

XAUUSD is the price of one troy ounce of gold, quoted in US dollars. If the quote reads 4,150.00, an ounce of gold costs $4,150 at that moment. When gold “goes up $20”, XAUUSD moves from 4,150 to 4,170.

Why is it called XAUUSD?

The symbol follows the currency-pair convention used in forex. The first code (XAU) is the base: the thing being priced. The second (USD) is the quote: the currency it’s priced in.

XAU is gold’s code under ISO 4217, the international standard for currency codes. Precious metals get codes beginning with X because they aren’t issued by any country, and AU comes from aurum, the Latin word for gold (it’s also gold’s symbol on the periodic table). The same system gives:

• XAGUSD: silver (from argentum)
• XPTUSD: platinum
• XPDUSD: palladium

You’ll also see gold priced in other currencies, such as XAUEUR (in euros) or XAUJPY (in yen). But XAUUSD is the global benchmark: almost all international gold is priced and settled in dollars.

How the gold price is actually made

There’s no single exchange that “owns” the gold price. It comes from several huge markets that trade around the clock and keep each other in line.

1. The London over-the-counter market

London is the centre of the world’s physical gold trading. Banks and dealers trade directly with each other (“over the counter”), mostly in 400-ounce bars held in London vaults. Twice a day, at 10:30 and 15:00 London time, an electronic auction sets the LBMA Gold Price, a benchmark used by central banks, miners and jewellers worldwide.

2. COMEX gold futures in New York

The COMEX division of CME Group lists gold futures: standardised contracts for 100 troy ounces (symbol GC), plus a smaller 10-ounce Micro Gold contract (MGC). Futures are where a large share of price discovery happens during US hours, especially around economic data.

3. Shanghai and other Asian markets

The Shanghai Gold Exchange is the world’s largest physical gold exchange, and China and India are the biggest consumers of gold jewellery and bars. Asian demand matters most during the Asian session and around festivals and wedding seasons.

4. What your broker shows you

Your broker’s XAUUSD price is a “spot” price: an estimate of what an ounce of gold is worth for immediate delivery, built from prices supplied by banks and other liquidity providers. Every broker quotes its own bid and ask, which is why the price on your platform can differ by a few cents from our XAUUSD price chart or another broker.

The different ways to trade or own gold

This guide focuses on XAUUSD as it’s traded on retail platforms: spot or CFD gold quoted against the dollar. Its main features are tiny minimum sizes, almost 24-hour trading, and leverage, which magnifies both gains and losses.

Reading a gold quote: bid, ask and spread

Every quote has two prices:

• Bid: the price you can sell at.
• Ask: the price you can buy at.
• Spread: the gap between them. It’s a cost you pay the moment you open a trade.

Example: your platform shows 4,150.10 / 4,150.35. If you buy, you pay 4,150.35. If you immediately sold, you’d get 4,150.10. That’s a $0.25 spread. On a 0.10 lot (10 oz), that costs $2.50; on 1.00 lot, $25.

Spreads are usually tight during the London and New York sessions and widen sharply around big news, the daily rollover break and the Sunday open. A strategy that works on paper can fail in real life if it ignores spread costs at the times it trades.

Lots, ounces and what a $1 move is worth

On most brokers, 1 standard lot = 100 troy ounces. Everything else follows from that:

Gold regularly moves $30–60 in a normal day, and much more on news days. In 2026 it has had days of $100+ and, on January 30, a fall of more than $500. One standard lot held through a $50 move against you is a $5,000 loss.

Some brokers use different contract sizes, especially on cent or micro accounts. Always check the contract specification for XAUUSD on your platform.

What about pips?

Brokers don’t agree on what a “pip” is on gold. Most treat a $0.10 move as one pip (so $1 = 10 pips), but some use $0.01. The money is the same either way, so it’s safest to think in dollars of gold price. Our XAUUSD pip value guide explains every definition with examples.

Leverage and margin, explained properly

Leverage lets you control a large position with a small deposit. Margin is the deposit your broker holds while the trade is open.

Margin required = Gold price × Ounces ÷ Leverage

At a gold price of $4,150, a 0.10 lot (10 oz, worth $41,500) needs:

The crucial point: leverage changes how big a position you’re allowed to open, not how much you lose per dollar move. A 0.10 lot loses $10 for every $1 gold falls, whether your leverage is 1:20 or 1:500. High leverage simply lets you open positions that are far too big for your account.

Margin call and stop-out. If losses eat into your account until your equity falls below a set percentage of the margin used, the broker warns you (margin call) and then starts closing your positions automatically (stop-out), often at the worst possible moment.

Leverage limits differ by country. In the EU, UK and Australia, retail leverage on gold CFDs is capped at 1:20. Retail CFD trading is not permitted in the US. Offshore brokers may offer 1:500 or more, but with far less investor protection. Check what applies where you live.

The real costs of trading gold

1. Spread: paid on every trade (see above).
2. Commission: some account types charge a fixed fee per lot instead of, or as well as, a wider spread.
3. Swap (overnight financing): if you hold a position past the daily rollover, you pay or receive interest. When US interest rates are high, as in 2026, holding long gold overnight usually costs money every night. Wednesday’s swap is often tripled to cover the weekend.
4. Slippage: in fast markets, your order can fill at a worse price than you clicked or set, especially stop orders during news.

For short-term traders, spread and slippage matter most. For swing traders holding for days or weeks, swaps can add up.

When gold trades

Spot gold trades from Sunday 6:00 pm to Friday 5:00 pm New York time, with a one-hour break at 5:00–6:00 pm New York time each day. Activity is very uneven:

All times shift by an hour when the UK and US change their clocks. See gold trading hours worldwide for a full table in New York, Dubai, Singapore and Sydney time, or the best time to trade gold in India for IST.

What moves the price of gold

Gold pays no interest or dividends, so its price depends on how attractive it is to hold compared with alternatives. The main drivers:

2026 is a perfect example of these forces fighting each other. War in the Middle East should have been bullish, but it pushed oil and inflation up, the Fed raised rates, and real yields climbed. Gold fell about 25% from its January record even as central banks kept buying. Read why gold is down in 2026 for the full story, and what moves gold prices for each driver in depth.

The news that moves gold most

1. Federal Reserve decisions and press conferences, eight times a year. See how to trade gold on Fed day.
2. US inflation data: CPI and PCE, monthly.
3. The US jobs report (NFP), usually the first Friday of each month. See how to trade gold on NFP day.
4. Geopolitical shocks, which are impossible to schedule.

Our gold news hub lists every high-impact event to the end of the year in your own time zone.

Gold’s history in a few numbers

Two lessons stand out. Over decades, gold has kept its value against paper money. But it has also had long, painful falls: after 1980 it took almost 30 years to regain its peak in nominal terms, and after 2011 it fell for several years. Gold is not a one-way bet.

A worked XAUUSD trade, step by step

Here’s how a disciplined trader might approach one trade. The numbers are illustrative.

1. Account and risk. Account balance: $2,000. Maximum risk per trade: 1%, or $20.
2. The idea. During the London session, gold pulls back to a support zone at 4,150 that held twice earlier in the week. The trader plans to buy if a bullish candle closes at that level.
3. Entry and stop. Entry at 4,152.00. The idea is wrong if price breaks back below the zone, so the stop goes at 4,144.00: an $8 stop.
4. Position size. Lots = $20 ÷ ($8 × 100) = 0.025, rounded down to 0.02 lots (2 oz). Actual risk: $8 × 2 = $16.
5. Target. The next resistance is near 4,176, a $24 move: 3 times the risk.
6. Costs. With a $0.25 spread, the cost is 0.02 × 100 × $0.25 = $0.50.
7. Outcome A, target hit: $24 × 2 oz = +$48, less $0.50 spread = +$47.50 (about +2.4%).
8. Outcome B, stop hit: −$16 − $0.50 = −$16.50 (about −0.8%).

With a 3:1 reward-to-risk ratio, the trader can be wrong more often than right and still come out ahead over many trades. The position size calculator does step 4 for you in seconds.

Common strategies traders use on gold

There’s no single “best” strategy. These are the approaches we explain in depth:

• Support and resistance: trading reactions at key price zones. Read the guide.
• Breakout and retest: waiting for a confirmed break, then entering on the pullback. Read the guide.
• Market structure: reading trends through highs, lows, breaks of structure and changes of character. Read the guide.
• Smart Money Concepts and ICT: liquidity, order blocks and fair value gaps. Start with Smart Money Concepts for XAUUSD.
• Session strategies: trading the London open or the New York session.

Whatever you choose, it only works with consistent risk management. See the XAUUSD risk management guide.

Why traders love XAUUSD, and why it’s hard

The appeal: deep liquidity, clear reactions to macro news, large intraday ranges, tiny minimum sizes and almost 24-hour trading.

The difficulty: the same features cut both ways.

• Speed. Gold can move $20 in a minute after data. Stops can slip.
• False breakouts. Session opens often push through a level, trigger stops, then reverse.
• News sensitivity. A single sentence from the Fed chair can reverse a trend.
• Leverage temptation. High leverage makes oversized positions feel normal, until one bad day wipes out weeks of gains.

Beginner mistakes to avoid

1. Sizing from margin instead of risk. “I can afford to open it” is not a risk plan.
2. No stop loss, or moving the stop further away when price goes against you.
3. Trading every session. Pick one window and learn how gold behaves there.
4. Chasing the first candle after news. Wait for spreads to settle and a structure to form.
5. Ignoring swaps on trades held for days.
6. Trading signals you don’t understand. If you can’t explain why you’re in a trade, you can’t manage it.
7. Not keeping a journal. Without records, you can’t see what’s working. See how to keep a trading journal.

More in common mistakes intermediate gold traders make.

Your checklist before the first live trade

• ✓ I know my broker’s contract size for XAUUSD and what a $1 move is worth.
• ✓ I know the spread at the times I plan to trade, and the overnight swap.
• ✓ I risk a fixed, small percentage per trade (many traders use 0.5–1%).
• ✓ Every trade has a stop loss decided before entry.
• ✓ I’ve checked the economic calendar for high-impact news today.
• ✓ I’ve practised the strategy on a demo account and kept a journal.
• ✓ I have a written trading plan.

A learning path for gold traders

1. Foundations: this guide, what moves gold prices and pip values.
2. Risk first: lot sizes for small accounts and risk management in volatile markets.
3. Reading the chart: support and resistance and market structure.
4. Timing: sessions and trading the news.
5. A plan and a journal: build your plan and review every trade.
6. Stay current: the weekly Gold Week Ahead and the news hub.

Gold trading glossary

Learn it with other gold traders

Reading is the start. Members of the XAUUSD Global community see live gold setups with the full reasoning behind them, get their own charts reviewed, and plan big news days together. See what’s inside.

Sources and further reading

• LBMA: the LBMA Gold Price
• CME Group: gold futures contract specifications
• World Gold Council: Gold Demand Trends
• ISO 4217 currency codes

Educational content only, not financial advice. Leveraged trading carries a high risk of loss, and you can lose more than you expect in fast markets. Contract sizes, costs and leverage limits vary by broker and country.

Frequently asked questions