XAUUSD meaning: what is XAU/USD?
XAU/USD is the trading symbol for gold priced in US dollars: the number shown is how many dollars one troy ounce of gold costs.
XAU/USD (often written XAUUSD) is gold priced in US dollars. XAU is the international code for one troy ounce of gold, and USD is the US dollar, so a quote of 3,000.00 means one ounce of gold costs $3,000. It is quoted and traded like a currency pair, which is why forex brokers list it alongside EUR/USD. On most platforms one standard lot is 100 ounces, so every $1 move in the price is worth $100 per lot, $10 per 0.10 lot and $1 per 0.01 lot.
Key takeaways
- XAU = one troy ounce of gold. The price is dollars per ounce, quoted to two decimals.
- One lot is usually 100 oz, so a $1 move is $100 per lot. Check your broker's contract size.
- Gold moves more than major pairs in dollar terms, so stops are wider and positions smaller.
What XAU and USD stand for
Currencies have three-letter codes set by an international standard, ISO 4217: USD for the US dollar, EUR for the euro, JPY for the yen. The same standard gives codes to precious metals, which start with X because they belong to no country. The rest of the code comes from the chemical symbol: gold is Au, from the Latin aurum, so gold is XAU. Silver (Ag, argentum) is XAG, platinum XPT and palladium XPD.
Each of these codes stands for one troy ounce of the metal, about 31.1 grams, slightly heavier than the ounce used for food. So XAU/USD reads like any other pair: how many units of the second currency (US dollars) buy one unit of the first (an ounce of gold). When it rises, gold is getting more expensive in dollars, or the dollar is getting weaker against gold, which is the same thing.
On a broker's platform XAU/USD is usually a spot contract or a CFD that tracks the spot gold price. You do not take delivery of metal; you are trading the price.
Lot sizes and what a move is worth
Gold is quoted in dollars and cents, to two decimal places. The common contract is 100 ounces per standard lot, though some brokers use other sizes, so check the contract specification on your platform before you trade. With 100 ounces per lot, and an illustrative price of $3,000:
| Size | Ounces | Position value at $3,000 | Per $1 move | Per $10 move |
|---|---|---|---|---|
| 1.00 lot | 100 | $300,000 | $100 | $1,000 |
| 0.10 lot | 10 | $30,000 | $10 | $100 |
| 0.01 lot | 1 | $3,000 | $1 | $10 |
Brokers disagree on what a "pip" is on gold. Many call $0.10 a pip, which makes one pip on one lot worth $10, the same as EUR/USD. Others call $0.01 a point, or $1 a pip. Talking in dollars avoids the confusion: a stop $5 away on 0.10 lots risks $50. The pip calculator handles gold, and what a pip is covers the forex conventions.
Margin, leverage and volatility
Gold usually carries lower maximum leverage than major currency pairs. Retail clients in the EU and UK, for example, are capped at 1:20 on gold, against 1:30 on majors. At 1:20, one lot worth $300,000 needs $15,000 of margin; 0.01 lots needs $150. The margin calculator works it out at the current price.
Gold also moves more. A daily range of $30 to $60 is ordinary, and on big news days it can be much more. A $40 move against one lot is $4,000. That is why gold traders use wider stops, measured in dollars rather than a handful of pips, and smaller positions. If you risk $100 on a trade with a $10 stop, the size is 0.10 lots; with a $20 stop, it is 0.05 lots. The position size calculator does the sum for any stop.
Spreads on gold are wider than on EUR/USD, and positions held overnight pay or earn swap, which on gold is often a cost on both sides.
What moves the gold price
- US interest rates and real yields. Gold pays no interest, so when US rates after inflation rise, holding gold costs more in lost income, and the reverse. See hawkish vs dovish.
- The US dollar. Because gold is priced in dollars, a weaker dollar tends to lift XAU/USD and a stronger one to weigh on it.
- Fear and safe-haven demand. Wars, financial stress and political shocks tend to bring buyers into gold.
- Central bank buying. Several central banks have added gold to their reserves in recent years, a steady source of demand.
Gold trades almost around the clock from Sunday evening to Friday evening, with a short daily break, and is most active when London and New York overlap.
Frequently asked questions
Is XAUUSD the same as gold?
How much is 1 lot of XAUUSD?
Why is gold called XAU?
Is XAU/USD a forex pair?
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