XAU/USD: Gold / US dollar

XAU/USD is the price of one troy ounce of gold in US dollars. Forex platforms list it next to currency pairs, using the same notation, because bank precious-metal desks historically sat alongside currency desks. It is not a currency, though: gold has no central bank, pays no interest, and its contract size and pip conventions differ from broker to broker. Understanding those differences before you trade it matters more than with any currency pair.

This profile covers what XAU/USD is and who trades it, what moves it, how it behaves through the day, how contract size and pips work, what it costs, correlations, history and the risks for beginners.

What XAU/USD is and who trades it

XAU is the ISO 4217 code for one troy ounce of gold, in the same way that USD is the code for the US dollar. A troy ounce is about 31.1 grams, a little heavier than the ordinary (avoirdupois) ounce. The price is quoted as dollars per ounce, so a rising XAU/USD means gold is getting more expensive in dollars, which can reflect gold strengthening, the dollar weakening, or both.

The physical market is centred on London, where bullion banks trade large bars over the counter, and price discovery is shared with gold futures on COMEX in New York and with exchanges in Shanghai and elsewhere. The LBMA Gold Price, a benchmark used to value and settle physical contracts, is set twice a day at 10:30 and 15:00 London time in electronic auctions run by ICE Benchmark Administration.

Participants include central banks, jewellers and fabricators, miners hedging production, investors in physically backed exchange-traded funds, macro funds and a very large population of retail CFD traders. Our guide to CFDs explains how a gold CFD gives you price exposure without owning metal.

Under ESMA's retail rules, gold has its own leverage cap of 20:1, the same as for non-major currency pairs and major stock indices, and above the 10:1 cap for other commodities. Our guide to ESMA leverage limits covers the full table.

What typically moves gold

Real interest rates

Gold pays no interest. When investors can earn a high inflation-adjusted return on safe government bonds, the opportunity cost of holding gold is higher; when real yields fall, it is lower. Over many periods gold has moved inversely to real US Treasury yields, but the relationship has broken down for long stretches, notably while central banks were buying heavily. Our guide to central banks and interest rates explains why the Federal Reserve sits at the centre of this.

The US dollar

Because gold is priced in dollars, a stronger dollar makes it more expensive for holders of other currencies, and a broadly stronger dollar has often coincided with a lower XAU/USD. That is a tendency, not a fixed rule: gold and the dollar have at times risen together when both were sought as havens.

Central bank demand

Central banks are major holders of gold, and since 2022 they have been buying at a far faster pace than in the previous decade: more than 1,000 tonnes a year in 2022, 2023 and 2024, according to the World Gold Council, with continued strong buying in 2025. That demand is driven by reserve diversification, not short-term price moves.

Fear and uncertainty

Gold has a long history as a safe haven. Wars, financial crises and political shocks have often brought buyers in. There is a twist: in the most acute moments of a liquidity crunch, gold has sometimes been sold along with everything else as investors raise cash, before recovering.

Inflation expectations

Gold is widely seen as a long-term store of value against inflation. In practice its short-term link to inflation data runs mostly through what that data means for interest rates and the dollar.

Scheduled US events

US non-farm payrolls, CPI, retail sales and FOMC decisions are usually the most volatile scheduled events for gold, because they move the dollar and real yields at the same time. See how economic data moves forex and our glossary entries on NFP and the FOMC.

Its character: sessions and volatility

Gold CFDs typically trade almost 24 hours a day from Sunday evening to Friday evening, with a short daily break around the US close; exact hours vary by broker, so check your contract specification. Times below are UK time; the UK and US change their clocks on different dates in March and October/November, so the New York times shift by an hour for a few weeks.

• Asian session (roughly 23:00 to 07:00 UK time): active, with significant physical demand from Asia, but usually less volatile than later in the day.
• London (about 08:00 to 17:00 UK time): liquidity builds as the London bullion market opens; the 10:30 and 15:00 auctions are set in this window.
• New York overlap (about 13:00 to 17:00 UK time): usually the busiest period, as COMEX futures and US data drive trading. US data at 08:30 New York time is 13:30 UK time for most of the year.
• Late New York and the daily break (around 21:00 to 23:00 UK time): thin liquidity and wider spreads.

Our market hours tool shows these sessions in your own time zone.

Gold has generally been more volatile than EUR/USD, and a dollar move that is routine for gold can be a large amount of money per lot. It is also prone to fast spikes around US data and geopolitical headlines, and to gaps at the weekly open. See gap risk and weekend risk.

Contract size and pips: check your broker

This is where gold catches people out. With currencies, a standard lot is 100,000 units and a pip is almost always the fourth (or second, for yen) decimal. With gold, conventions vary.

• Contract size: a standard lot is usually 100 troy ounces, matching the main COMEX futures contract, but some brokers use different sizes. Always read the contract specification on the platform or website.
• Pip size: brokers quote gold to two decimal places (for example 2,350.25, an illustrative price), but they do not agree on what a "pip" is. Many treat 0.01 as a pip (a point), some treat 0.1 as a pip, and some talk about whole dollars. Our site uses 0.01, but your broker's definition is the one that applies to its spread figures and its platform.

The safest approach is to stop thinking in pips for gold and think in dollars per ounce. On a 100-ounce lot:

• a 0.01 move is worth 1 USD;
• a 0.10 move is worth 10 USD;
• a 1.00 move (one dollar per ounce) is worth 100 USD;
• a 10.00 move is worth 1,000 USD.

If a broker quotes a gold spread as "25 pips", you need to know whether that means 0.25 or 2.50 dollars per ounce. The difference is a factor of ten in cost. Our guide to what is a pip explains the currency convention, and the pip value calculator helps for gold too once you know the contract size.

Worked example

These numbers are illustrative. Your account is in dollars and your broker uses 100-ounce lots.

You buy 0.1 lots (10 ounces) of XAU/USD at 2,350.00 with a stop at 2,335.00, 15 dollars below. Each 1-dollar move is worth 10 USD on 10 ounces, so the stop would cost 150 USD, before spread and swap.

The margin at 20:1 is the notional value divided by 20: 10 ounces times 2,350 dollars is 23,500 USD, divided by 20 is 1,175 USD. If your account is in euros or pounds, both the profit and loss and the margin are converted at the current exchange rate, which adds a currency effect; see currency conversion and account base currency.

Now imagine a beginner who opens one full lot on the same idea because the platform shows enough free margin. The same 15-dollar stop now costs 1,500 USD, and margin is 11,750 USD. A routine move against them, the kind gold can make in an hour around US data, becomes a serious loss. Use the position size calculator and margin calculator first, and read our guide to leverage and margin.

Costs of trading gold

Gold spreads are usually wider in percentage terms than on the main currency pairs, and they widen further in the Asian session, around the daily break, at the weekly open and around big US data. Compare spreads in dollars per ounce at the time you trade, not the "from" figure; our guides to spreads and commissions and why spreads widen explain how.

Overnight financing works differently from a currency pair. Gold has no interest rate of its own, so the swap is generally based on dollar interest rates plus the broker's charge. Holding long has typically meant paying a financing charge, and depending on the broker short positions may pay or receive a little. Check the swap rates on your platform; see swap and overnight financing.

Correlations with other markets

• The US dollar index and EUR/USD: gold has often moved opposite the dollar, so it has frequently shown a positive relationship with EUR/USD.
• USD/JPY and USD/CHF: with the yen and franc also seen as havens, gold has at times moved opposite these pairs.
• AUD/USD: Australia is one of the world's largest gold producers, and AUD/USD has sometimes moved with gold.
• Silver (XAG/USD): usually moves in the same direction as gold but with larger swings.

All of these relationships come and go. Check them over a recent window rather than relying on them; see currency correlation.

Notable history

The end of dollar convertibility (1971)

Under the post-war Bretton Woods system, the US dollar was convertible into gold for foreign governments at a fixed price. On 15 August 1971 President Nixon suspended that convertibility, and over the following years gold became a freely floating market. The modern gold price, including the XAU/USD quote on your platform, dates from that shift.

The London benchmark (2015)

The London Gold Fix, dating from 1919, was replaced on 20 March 2015 by the LBMA Gold Price, an electronic auction run by ICE Benchmark Administration and regulated by the UK Financial Conduct Authority.

Central bank buying and record highs (2022 to 2025)

From 2022 central banks stepped up gold purchases sharply, and gold set a long series of record highs in 2024 and 2025. It is a reminder that gold can trend strongly for reasons that have little to do with any one data release, and that past records say nothing about what comes next.

Trading gold as a beginner

• Read the contract specification first. Contract size, pip definition, trading hours, the daily break, swap rates and margin all vary by broker.
• Think in dollars per ounce. Convert every stop into money before you place it. A one-dollar move is usually 100 USD on a standard lot.
• Use smaller sizes than on a currency pair. Gold's moves in money terms are large; most beginners should start with micro or mini sizes. See position sizing.
• Treat US data days with care. Payrolls, CPI and FOMC decisions can move gold sharply in seconds, with spreads widening and slippage common.
• Be realistic. Most retail CFD accounts lose money, and leverage magnifies losses as well as gains. Practise on a demo account before trading gold with real money.

Frequently asked questions

What does XAU mean?

XAU is the ISO 4217 code for one troy ounce of gold. "Au" comes from the chemical symbol for gold, and the X marks it as a code that is not a national currency. XAU/USD is the price of one troy ounce in US dollars.

How much is one pip on gold?

It depends on how your broker defines a pip. Many treat 0.01 as a pip, worth 1 USD on a 100-ounce lot; others treat 0.1 as a pip, worth 10 USD. Check the contract specification, and think in dollars per ounce to avoid confusion.

What is a standard lot of gold?

Usually 100 troy ounces, matching the main COMEX futures contract, but not every broker uses that size. A one-dollar move in the price is then worth 100 USD per lot.

What leverage can I use on gold in the EU?

Retail clients of EU-regulated brokers are capped at 20:1 on gold under ESMA rules, meaning a margin of 5% of the position's value. Other commodities, including silver, are capped at 10:1.

Why does gold often rise when the dollar falls?

Gold is priced in dollars, so a weaker dollar makes it cheaper for buyers using other currencies and tends to support the dollar price. Lower US real interest rates, which often accompany a weaker dollar, also reduce the cost of holding an asset that pays no interest. The relationship is common but not constant.