How to trade gold (XAU/USD)

What is XAU/USD?

XAU/USD is the price of one troy ounce of gold in US dollars. XAU is the market code for gold. If the quote reads 2,000.00, one ounce costs 2,000 dollars. The price is set in dollars worldwide, so gold reacts to the dollar as well as to demand for the metal.

A gold CFD tracks that price without you owning bullion. You can open a position on a rise or a fall.

What moves the price of gold?

Real yields are the core driver. A real yield is a bond yield after inflation. Gold pays no interest, so when real yields rise, holding it costs more in missed income and the price often weakens. When real yields fall, gold tends to gain.

The US dollar matters because a stronger dollar makes gold dearer for buyers using other currencies. Demand also comes from defensive buying in times of stress or conflict, from central banks adding to their reserves, and from flows into gold-backed funds. Jewellery demand, strongest in India and China, adds a slower seasonal layer.

Inflation fears can lift gold, but only if markets think central banks will not respond with higher rates. That is why the same inflation report can send gold up one month and down the next.

When is gold most active?

Gold is most active when London and New York overlap, in the European afternoon. US data at 13:30 GMT or 12:30 in summer often triggers the day's biggest moves. Asian hours are usually calmer, though Chinese and Indian demand headlines can add bursts.

Check trading hours for the instrument in your platform, as they can differ from forex pairs and include a daily break.

How much is a move in gold worth?

Gold is quoted to two decimals, and definitions of a pip or point vary between brokers, so think in dollars of price move instead. On the sample specification on our metals page the contract size is 100 ounces per lot, which means a $1 move is worth $100 per lot. Confirm the contract size in the platform.

What are the risks of trading gold CFDs?

Gold can move $30 to $50 in a day when data surprises, and far more in a crisis. Each dollar is a large number of points on the platform, so small lot sizes matter.

Gaps are possible over weekends and around major announcements, and a stop can fill beyond your level. Leverage magnifies gains and losses alike, and you can lose more than your deposit. Use the margin calculator to see what a position ties up.

Which events should you watch?

Gold responds to anything that shifts yields or the dollar. Track these on the economic calendar.

How do traders approach gold?

Gold attracts both trend followers and range traders. It often trends for weeks when real yields and the dollar point the same way, and it ranges when they conflict. Many traders mark the highs and lows from the Asian and London sessions and watch the New York session for a break.

Price also tends to stall around round numbers, so hundred-dollar levels get attention. Others pair gold with the dollar index, expecting an inverse link, but the relation weakens when both are bid in a crisis.

Because moves are measured in dollars and contracts are large, many traders use small lots. On a 100 ounce contract, a 0.01 lot is one ounce, which turns a $20 move into about $20 instead of $2,000.

How does gold compare with silver?

Silver tracks gold in direction but swings more, partly because it has industrial uses and a smaller market. The gold-to-silver ratio shows how many ounces of silver buy one ounce of gold, and some traders watch it for signs of a turn.

Silver and the other metals are covered on the metals page. Their contract sizes differ from gold, so the money value of a $1 move is not the same.

How do you trade gold with AQ Markets?

AQ Markets offers gold CFDs on MetaTrader 4 and MetaTrader 5, alongside silver, platinum and palladium. Read the spread, swap, margin and hours for XAU/USD in the platform specification, because they can change.

Choose an account from account types. Open a demo account first, so you feel how fast a dollar-sized swing can move your balance.