Key takeaways
- XAU is the international currency-style code for one troy ounce of gold; USD is the US dollar.
- A quote such as 2,000.50 means one ounce costs 2,000.50 dollars at that moment.
- On a contract of 100 ounces, a $1 move in XAUUSD equals $100 of profit or loss.
- XAUUSD often moves opposite to the US dollar and to real bond yields, though not every day.
- Contract sizes vary between platforms, so always check the specification in your app.
01Breaking Down the Symbol
Currency codes follow the ISO 4217 standard, and precious metals have their own codes that begin with X: XAU for gold (from the Latin aurum), XAG for silver and XPT for platinum. Because gold is treated like a currency in this system, it is quoted in pairs just like EUR/USD.
- Base: XAU, one troy ounce of gold (about 31.1 grams).
- Quote currency: USD, the US dollar.
- Reading: the price tells you how many dollars buy one ounce.
If XAUUSD rises, gold is getting more expensive in dollar terms, which can reflect stronger gold demand, a weaker dollar or both. Silver follows the same logic under the symbol XAGUSD, explained in our silver trading guide.
02How an XAUUSD Quote Works
Every quote shows two prices. The bid is the price at which you can sell, and the ask is the price at which you can buy. The gap between them is the spread, a built-in cost of trading.
Hypothetical example: a screen showing bid 2,000.30 and ask 2,000.60 has a spread of 0.30. If you bought at the ask and immediately closed at the bid, you would lose that 0.30 per ounce. Spreads change with liquidity and tend to widen around big news or in quiet hours. You can see the live spread on each instrument in the app’s quote screen, and our page on forex spread and swap costs explains how these costs add up.
03Points, Pips and Lots on Gold
Gold terminology is less standardised than forex, which confuses many new traders. XAUUSD is usually quoted to two decimal places, so the smallest price step is 0.01. Some traders call 0.01 a point and 0.10 a pip, while others count a full dollar as the meaningful unit. What matters is the money value of a move, not the label.
Common contract sizes
| Lot label | Ounces (common convention) | Value of a $1 move | Value of a 0.01 move |
|---|---|---|---|
| Standard lot (1.00) | 100 oz | $100 | $1.00 |
| Mini lot (0.10) | 10 oz | $10 | $0.10 |
| Micro lot (0.01) | 1 oz | $1 | $0.01 |
These figures follow a widely used convention, but contract specifications differ between providers. Check the instrument details in your app before trading, and use our pip and lot size calculator to confirm position values.
Want to watch XAUUSD move and test the maths with virtual funds? Download QTFX Markets on Google Play and follow gold on a demo account first.
Get it on Google Play04Worked Examples (Hypothetical)
The examples below use invented prices to illustrate the arithmetic. They are not real quotes or actual trading conditions.
Example 1: a long trade
You buy 0.20 lots (20 oz under the convention above) at 2,000.00. Gold rises to 2,012.50. The move is 12.50 dollars per ounce, so the gross result is 12.50 × 20 = $250 profit, before spread and any overnight costs.
Example 2: a short trade that goes wrong
You sell 0.50 lots (50 oz) at 2,000.00, expecting a drop. Instead the price climbs to 2,008.00. The move against you is 8 dollars per ounce, so the loss is 8 × 50 = $400.
Example 3: sizing from a stop
You are willing to risk $100 and want a stop 5 dollars away from entry. Divide 100 by 5 to get 20 ounces, which is 0.20 lots. This approach ties position size to risk rather than to how much margin is available, a principle covered in our guide to leverage in trading.
05How Volatile Is XAUUSD?
Gold is generally more volatile than major currency pairs in percentage terms per session, and much of its movement clusters around specific events. Typical behaviour patterns include:
- Quieter, range-bound trade during much of the Asian session.
- Expanding ranges when London opens and especially during the London–New York overlap.
- Sharp spikes in the minutes after US jobs, inflation and central bank announcements.
- Occasional gaps when markets reopen after the weekend if major news broke while they were closed.
Because volatility changes over time, many traders measure it with the Average True Range indicator and widen or tighten stops accordingly. A position size that felt comfortable in a calm week can be far too large in a news-heavy one.
06XAUUSD, the Dollar and Yields
Two relationships explain a large share of gold’s day-to-day swings:
- The US dollar. Since gold is priced in dollars, a stronger dollar makes it more expensive for buyers using other currencies, which can weigh on demand. XAUUSD therefore often moves opposite to broad dollar strength.
- Real yields. Gold pays no income, so when inflation-adjusted US Treasury yields rise, the opportunity cost of holding gold rises too. Falling real yields have tended to support gold.
These are tendencies, not rules. Safe-haven buying during a crisis can lift both gold and the dollar at the same time, and central-bank purchases can support gold even when yields are high. Our article on what drives gold prices looks at these forces in more depth.
07Trading XAUUSD Responsibly
Knowing the maths is only half the job. Before placing an XAUUSD trade, decide your stop level, calculate the position size from it and check upcoming events on the economic calendar. In QTFX Markets you can follow the gold quote, view candlestick or line charts on several timeframes and attach protective orders when you open a position.
CFDs on gold are complex and leveraged. Prices can move fast enough to produce losses larger than expected, so trade only with money you can afford to lose and confirm that CFD trading is allowed in your country. For broader context on technique, read how to trade gold step by step.
Questions readers ask
What does XAUUSD stand for?
XAUUSD combines XAU, the standard code for one troy ounce of gold, with USD, the US dollar. The quote tells you how many US dollars are needed to buy one ounce of gold. It works like a currency pair, so buying XAUUSD means betting gold will rise against the dollar, and selling means betting it will fall.
How much is one pip on XAUUSD?
Conventions differ. Many platforms quote gold to two decimals, so the smallest step is 0.01, and some traders call 0.10 a pip. Under the common 100-ounce standard lot, a 0.01 move is worth $1 and a $1 move is worth $100. Contract sizes vary, so check your platform’s instrument specification before calculating.
Why does XAUUSD often fall when the dollar rises?
Gold is priced in dollars, so when the dollar strengthens, gold becomes more expensive for buyers holding other currencies, which can reduce demand. A strong dollar often coincides with higher US yields too, raising the opportunity cost of holding a non-yielding asset. The relationship is common but not constant, especially during market stress.
Is XAUUSD the same as the spot gold price?
XAUUSD is the standard symbol used to quote spot gold against the dollar, so it closely tracks the global spot price. The exact figure you see on a trading platform reflects that provider’s bid and ask, including its spread. Small differences between platforms are normal, and CFD prices are not the same as buying physical gold.
