What XAUUSD means
XAU is the international code for one troy ounce of gold, and USD is the US dollar. So XAUUSD is the price of one troy ounce of gold in US dollars. One troy ounce is 31.1035 grams.
Most retail traders do not buy physical metal. They trade contracts, usually CFDs or similar products offered by a broker, which means you are speculating on the price moving up or down. Check exactly what product your broker offers and how it works.
Lots, contract size and what a $1 move is worth
You trade in lots. On many brokers, 1.00 lot of gold is 100 ounces, which means gold moving $1 changes your profit or loss by $100 per lot. This is common, but it is set by your broker, so check the contract specification.
| Lot size | Ounces | Profit/loss per $1 move | Profit/loss per $5 move |
|---|---|---|---|
| 0.01 | 1 oz | $1 | $5 |
| 0.10 | 10 oz | $10 | $50 |
| 0.50 | 50 oz | $50 | $250 |
| 1.00 | 100 oz | $100 | $500 |
Worked example
You buy 0.10 lot (10 oz). Gold rises $6: you gain 10 x $6 = $60. Gold falls $6: you lose $60. Spread, commission and swap are not included.
To turn this into a position size for your account, read the gold risk management guide or use the lot size calculator.
The costs of trading gold
- Spread: the gap between the buy and sell price. You pay it when you enter. As a hypothetical, a spread of $0.30 on a 1.00 lot costs about $30.
- Commission: some account types charge a fee per lot instead of, or on top of, the spread.
- Swap: a charge or credit for holding a position overnight.
- Slippage: the difference between the price you wanted and the price you got, most common in fast markets.
What commonly moves gold
These are factors traders commonly watch. None of them predicts direction on its own, and relationships change over time, so treat them as awareness, not signals.
- The US dollar. Gold is priced in dollars, and the two often move in opposite directions, but not always.
- Interest rates and bond yields. Gold pays no interest, so rising rate expectations are often seen as a headwind and falling ones as a support.
- Inflation data. It shapes expectations about interest rates.
- Central bank decisions and buying. Policy announcements can move the market quickly, and central banks are also buyers of gold.
- Uncertainty and safe-haven demand. Gold is often bought when investors are worried about risks elsewhere.
Check an economic calendar each day for high-impact events, and decide before the release whether you will trade through it.
When gold trades: sessions in Pakistan time
Gold trades nearly around the clock on weekdays and is closed at the weekend. Broker hours and short daily breaks vary. These session times are approximate:
| Session | Winter (approx. PKT) | Summer (approx. PKT) |
|---|---|---|
| Asia (Tokyo) | 05:00 to 14:00 | 05:00 to 14:00 |
| London | 13:00 to 22:00 | 12:00 to 21:00 |
| New York | 18:00 to 03:00 | 17:00 to 02:00 |
| London and New York overlap | 18:00 to 22:00 | 17:00 to 21:00 |
Gold is often more active when London and New York are both open. The UK and the US change their clocks on different dates, so these gaps shift for a few weeks each year. Check the times against a session clock before you rely on them.
Common beginner mistakes
- Trading without a stop loss, or moving it further away when the trade goes wrong.
- Using a big lot because leverage allows it, instead of sizing from risk.
- Holding through major news without a plan.
- Ignoring spread and other costs, especially when scalping.
- Copying signals without understanding the trade.
- Not keeping a journal, so the same mistakes repeat.
Frequently asked questions
Is gold safer to trade than forex pairs?
Not automatically. Gold can move fast, and leveraged positions magnify both gains and losses. Risk depends on your lot size, your stop and your discipline.
How much money do I need to start?
There is no single number. It depends on your broker's minimum lot and on how much you can afford to lose. Size every trade from your risk, and check that the minimum lot does not already risk more than you planned.
Which session is best for gold?
There is no single best session. The London and New York overlap is often more active, but the right time is when you can focus and manage your risk properly.
Is the XAUUSD price the same as the gold rate in Pakistan?
No. Local rates depend on the exchange rate and local premiums, and are usually quoted per tola, not per troy ounce.
Next: learn to size your trades
Position size is the biggest lever you control. Start with the risk management guide.
Read the risk guide