1 pip in xauusd
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Not to be confused with xauusd, pip, pip forex.
One pip in XAUUSD is the smallest standard price increment used when quoting gold against the US dollar. Because XAUUSD is quoted in US dollars per troy ounce, the conventional pip is a move of 0.01 in the quoted price, equivalent to one US cent per ounce. Some brokers instead quote gold to three decimal places and call 0.001 a pip, so the monetary value of one pip varies by venue and contract size.
Pip size and contract size
On a two-decimal gold quote, one pip equals 0.01 USD per troy ounce. The cash value of that pip depends on the contract size the broker assigns to one lot of XAUUSD, which is not standardised across the industry: common sizes include 100 troy ounces, 10 troy ounces and 1 troy ounce per lot.
- At 100 oz per lot, one pip (0.01) is worth 1.00 USD per lot.
- At 10 oz per lot, one pip is worth 0.10 USD per lot.
- At 1 oz per lot, one pip is worth 0.01 USD per lot.
Where a broker quotes three decimals, the smallest increment is 0.001 and its value is one tenth of the figures above for the same contract size.
Worked example
A trader holds 2 lots of XAUUSD with a contract size of 100 troy ounces per lot. The price moves from 2,350.00 to 2,357.50.
The same 7.50 move on a 10 oz per lot contract would be worth 150 USD, showing that the pip count is identical while the cash value is not.
Why the definition varies
There is no single regulator-mandated pip size for gold. Brokers differ on the number of decimal places quoted and on the contract size of one lot, and both choices change the cash value of a pip. A statement of pip value in XAUUSD is therefore only meaningful when the quote precision and the contract size are stated alongside it.
Often confused with
- xauusd
- XAUUSD is the instrument itself, the gold-to-US-dollar pair, whereas one pip in XAUUSD is a unit of price movement within that instrument; the visible sign is that XAUUSD appears as a ticker symbol, while the pip is a number of decimal places.
- pip
- A pip is the generic smallest quoted increment used across many instruments, while one pip in XAUUSD is that increment specified for gold, conventionally 0.01 USD per ounce; the visible sign is the presence of the XAUUSD pair, which fixes the pip at a gold-specific value.
- pip forex
- Pip forex refers to the increment used in currency pairs, typically 0.0001 for most pairs, while one pip in XAUUSD is a gold quote increment of 0.01; the visible sign is the number of decimal places, four for most forex pairs against two for gold.