Xauusd trading
Family X · Account mechanics
Not to be confused with xauusd, 1 pip in xauusd, xauusd what is it.
XAUUSD trading is the buying and selling of the gold–US dollar pair, in which the price of one troy ounce of gold is expressed in US dollars. It is a cash-settled instrument: a position is opened and closed for the difference in price, and no metal changes hands. Because gold is quoted against the dollar, the pair is traded on the same platforms and in the same lot-based format as foreign-exchange pairs.
Contract mechanics
XAUUSD is quoted to two decimal places, and the smallest quoted increment is 0.01 US dollars per troy ounce. Position size is expressed in lots, and the number of ounces a lot represents varies by broker and instrument type, so the notional value of a position is not a fixed universal figure.
Profit and loss are calculated in US dollars from the change in the quoted price multiplied by the number of ounces held. A long position gains when the quoted price rises; a short position gains when it falls. Because the pair is quoted in dollars, no separate currency conversion is applied to the result.
Worked example
The same arithmetic applies in reverse to a short position: a fall of 12.50 in the quoted price on 10 ounces produces a gain of 125.00 USD.
Costs and trading hours
The cost of holding a position is the spread between the bid and the ask, plus any commission charged by the venue. The typical spread on XAUUSD is wider than on the most liquid currency pairs, and its exact size varies by broker, account type and market conditions.
XAUUSD is quoted for roughly 23 hours a day on weekdays, with a daily break and reduced liquidity around rollover. Margin requirements, minimum trade sizes and the treatment of positions held overnight are set by the broker and the applicable regulator, and therefore differ between jurisdictions.
Often confused with
- xauusd
- XAUUSD is the instrument itself, the gold–dollar pair, whereas XAUUSD trading is the activity of buying and selling it; the visible sign is that the instrument name appears as a quoted symbol, while the activity name appears as a description of what a participant does.
- 1 pip in xauusd
- A pip in XAUUSD is a single unit of price movement, conventionally 0.01 US dollars per troy ounce, while XAUUSD trading is the wider activity of taking positions; the visible sign is that the pip figure is a fixed increment, whereas trading covers entries, exits and costs.
- xauusd what is it
- XAUUSD is the trading symbol for the price of one troy ounce of gold quoted in United States dollars, where XAU is the ISO 4217 code for gold and USD is the code for the US dollar.