Gold Trading for Beginners: How XAU/USD Works and What Moves It
Gold is one of the most traded markets in the world and a favourite with day traders for its big, clean moves. It's also volatile, so the basics of quotes, sizing and drivers matter more than usual.
Gold, quoted as XAU/USD, is priced per ounce and moves on the dollar, real yields and risk sentiment. A standard lot is typically 100 ounces, where a $0.10 move is usually called one pip and is worth about $10. Gold moves much further per day than most currency pairs, so size smaller.
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Open the live chart →How gold is quoted
Retail traders usually trade gold as XAU/USD: the price of one troy ounce in US dollars. A standard contract is commonly 100 ounces, so a $1 move in price is $100 per standard lot. Many platforms call a $0.10 move one "pip", but conventions differ between brokers, so always check the contract specification. The lot size calculator handles gold.
What moves gold
- Real interest rates: gold pays no interest, so it tends to be weaker when inflation-adjusted yields rise and stronger when they fall.
- The US dollar: gold is priced in dollars, so a stronger dollar is often a headwind.
- Risk and uncertainty: gold can attract safe-haven demand in stress, though not reliably every time.
- Central bank buying and inflation expectations over the longer term.
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Play free, no signup →When gold is most active
Gold trades nearly 24 hours on weekdays. Activity typically picks up at the London open and around the New York session, and it reacts strongly to US data such as CPI and jobs reports and Federal Reserve decisions.
Managing gold's volatility
Gold's daily range is large compared with most currency pairs, so stops are wider in dollars and positions must be smaller for the same risk. A common beginner mistake is trading gold with the same lot size used on EUR/USD, which can mean many times the intended risk.
Frequently asked questions
How much is a pip in gold?
It depends on the broker's convention. With a 100-ounce contract, a $0.10 price move is $10 per standard lot, and a $1 move is $100.
What moves the price of gold?
Mainly real interest rates, the US dollar, risk sentiment and longer-term demand such as central bank buying.
Is gold good for beginners?
It's popular but volatile. Beginners should size positions carefully, because gold's moves are large relative to most currency pairs.
When is the best time to trade gold?
Activity usually rises at the London open and during the New York session, especially around major US data.
Keep learning
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