How to trade gold: what moves XAU/USD, when it trades and how to size a position

You trade gold by taking a position on XAU/USD, the price of one troy ounce of gold in US dollars, usually through a CFD: buy if you expect it to rise, sell if you expect it to fall. Learning how to trade gold means learning what moves that price and when, and what a $1 move is worth to you.

In short

• XAU/USD is the price of one troy ounce of gold (about 31.1 grams) in US dollars, and a CFD on it lets you go long or short without owning any metal.
• Gold tends to fall when US real interest rates and the dollar rise, and to rise when they fall or when markets are under stress, though none of these links holds every time.
• Gold trades from Sunday evening to Friday evening UK time and is usually busiest when London and New York are both open, from about 13:00 to 17:00 UK time.
• A "pip" on gold means $0.01 on some platforms and $0.10 on others, so plan stops in dollars of price and size in ounces.
• At an assumed 100 ounces per lot, a $16 stop on 0.06 lots risks $96, less than a fifth of the $500 daily loss limit on a $10,000 Classic account.

What is XAU/USD?

XAU/USD is the spot price of gold in US dollars. XAU is the international currency code for one troy ounce of gold, as USD is the code for the dollar, so a quote of 4,000.00 means one ounce costs $4,000. Trading platforms base their gold CFD prices on this spot market.

Bars and coins mean storing real metal. Gold exchange-traded funds (ETFs) hold metal on your behalf, and mining shares give indirect exposure that also depends on how each company is run. A CFD (contract for difference) settles only the change in price between your entry and your exit, so you can sell first if you expect gold to fall, and positions kept overnight carry holding costs.

For short-term gold trading, a CFD lets you take a position of a few ounces, set a stop, and close within minutes or days. Each platform sets its own contract size, usually stated as a number of ounces per lot, so read the symbol specification before your first trade.

What moves the price of gold?

Gold moves mainly on US real interest rates, the US dollar and risk sentiment, with central-bank buying and physical demand working more slowly in the background. From day to day, the largest moves usually come when US data or the Federal Reserve (the Fed) changes what markets expect for interest rates.

Real yields and interest rates

A real yield is the interest rate on a government bond minus expected inflation. If the 10-year US Treasury yields 4.3% and markets expect inflation of 2.3% a year, the real yield is about 2.0% (figures for illustration). Gold pays no interest, so when real yields rise, holding it means giving up more income elsewhere, and the price tends to come under pressure. When real yields fall, that cost shrinks. Traders watch the yield on inflation-protected Treasuries (TIPS) as a direct measure.

The US dollar

Gold is priced in dollars. When the dollar strengthens, an ounce costs more in euros, yen or rupees, which can weigh on demand from outside the US, and XAU/USD often falls. The US dollar index (DXY), which measures the dollar against six major currencies, is a quick check on which way the dollar is moving.

Risk sentiment and safe-haven demand

Investors often buy gold during wars, banking stress or sharp falls in shares, because its value does not depend on any company or government paying what it owes. The pattern can break in a panic: in March 2020, gold fell for a time during the stock market sell-off as investors sold whatever they could to cover losses elsewhere.

Central banks and physical demand

Central-bank purchases, jewellery demand in countries such as India and China, and money moving into or out of gold ETFs change slowly, over months rather than hours. They explain long trends more than intraday moves.

None of these links is fixed. In 2022 and 2023, gold held up while US real yields rose sharply, during a period of heavy buying by central banks.

When does gold trade, and when does it move most?

Gold trades over the counter almost around the clock, from Sunday evening to Friday evening UK time. It is usually most active when London and New York overlap, from about 13:00 to 17:00 UK time, and around US data at 08:30 New York time, which is 13:30 in the UK for most of the year.

These are the times to mark on a gold chart, in UK time:

• From about midnight to 07:00, Asian hours are usually quieter for gold, with demand from China and India in the background.
• At 08:00 London opens. London is the centre of the global over-the-counter gold market, and activity picks up.
• At 10:30 and 15:00, the LBMA Gold Price auctions set a benchmark price used across the industry.
• At 13:30, the US jobs report and consumer price index (CPI) come out on their release days, and gold often moves sharply on them.
• At 14:30, the US stock market opens.
• At 19:00, on eight days a year, the Fed publishes its interest rate decision.

The US and UK change their clocks on different dates, so for a few weeks a year the US times arrive an hour earlier in the UK: data at 12:30, the stock market open at 13:30 and Fed decisions at 18:00. In 2026 that applies from 26 to 30 October, and in 2027 from 15 to 26 March and 1 to 5 November. The London times do not move.

Platform hours differ, and many platforms pause gold for a short break each day, so check the symbol's trading hours. The trading sessions lesson covers how the sessions overlap.

How do pips, points and lots work on gold?

Gold is usually quoted to two decimal places, such as 4,012.40, but platforms disagree on what a "pip" is. Some treat $0.01 as a pip and others $0.10, and many traders call a $1 move a "point", so convert every stop into dollars of price. Your dollar result then depends on how many ounces you hold.

How much is 100 pips on XAU/USD?

If your platform calls $0.10 a pip, 100 pips is a $10 move in the gold price. If it calls $0.01 a pip, 100 pips is a $1 move. The same phrase can mean a tenfold difference, so a "100-pip stop" copied from someone on another platform can be far tighter or wider than they meant. The pips and lots lesson covers the general idea.

How much is 0.01 lot of gold worth?

That depends on the platform's contract size. The dollar result of a trade is the number of ounces you hold multiplied by the price move. This table assumes one lot is 100 ounces, a common setting, though some platforms use other sizes.

How volatile is gold?

Gold's moves in dollars grow with its price. A 1% move is $20 when gold is at 2,000 and $40 when it is at 4,000, so a $5 stop that might once have looked wide now sits inside ordinary noise. Measure the current range with the average true range (ATR), the average distance between each day's high and low over 14 days. An ATR of $48 at a price of 4,000 means a normal day covers about 1.2%.

How to trade gold step by step

Start with a reason for the trade, check the economic calendar, place the stop beyond normal noise, size the position from that stop, and decide before you enter what you will do at data releases and over the weekend. Write each decision down before you place the order.

1. Form a view from the drivers and the chart, for example a rise in gold after real yields fall, with price holding above the low it made in Asian hours.
2. Check the calendar for US CPI, the jobs report and Fed decisions, and decide whether you will be flat, smaller or unchanged through them.
3. Put the stop where the idea is proved wrong, such as beyond a recent low, then compare it with the ATR. A stop that is a small fraction of a normal day's range is easily hit by noise alone.
4. Size the position: dollar risk ÷ (stop in dollars × ounces per lot) = lots, rounded down.
5. Set a target and compare it with the stop using the risk-reward ratio. A 2R target, twice the risk, is a common starting point.
6. Choose a time to close if neither the stop nor the target is hit, and decide whether you will hold over a weekend.

Worked example: a gold trade on a $10,000 Classic account

This example uses a $10,000 Classic account, which has a $500 daily loss limit on its first day, and a plan to risk 1% of the starting balance ($100) per trade. The prices are for illustration only. The contract size is an assumption: one lot is taken to be 100 ounces, with volume in steps of 0.01 lots. Check the real figure in the symbol specification before you trade.

1. Gold dips after the London open and holds above its Asian-hours low of 3,997.00. The 14-day ATR is $48.
2. You buy at 4,012.40 and place the stop at 3,996.40, below that low. The stop is $16.00 away, a third of the ATR.
3. Size: $100 ÷ ($16 × 100 ounces) = 0.0625 lots, rounded down to 0.06 lots, or 6 ounces. The risk is 6 × $16 = $96.
4. The 2R target is $32 above the entry, at 4,044.40, worth 6 × $32 = $192.
5. The position's notional value is 6 × 4,012.40 = $24,074.40, about 2.4 times the account, which is why a $16 move costs nearly 1% of it.

The same stop looks very different in pips. If your platform calls $0.10 a pip, the stop is 160 pips. If it calls $0.01 a pip, it is 1,600. In dollars of price it is $16 either way.

Now suppose you hold through a CPI release at 13:30 UK time. Gold is at 4,004.00 and drops straight to 3,980.00 on the figure, skipping the stop, which fills at 3,980.00. The loss is 6 × $32.40 = $194.40, about 2R, because in a fast market a stop fills at the next available price.

These figures are before costs. Simulated trades carry trading costs, as they would on a live account: a commission when a trade opens and when it closes, a price markup on some symbols, and holding costs on positions kept overnight.

How trading gold works on CMC Funded

Commodities are among the markets on CMC Funded, alongside forex, indices, shares, cryptocurrencies and prediction markets. Check the platform's symbol list for gold, and its symbol specification for the contract size and trading hours to use in the sums above.

The daily loss limit is measured on equity, so the floating loss on an open gold trade counts before you close it, and reaching it ends the account. Each day it is 5% (Classic) or 4% (Direct) of your equity at the start of that day, so it moves with your account. The table sizes a 1% risk with the $16 stop from the example, at the same assumed 100 ounces per lot, and shows how far gold would have to move against that one position to reach the limit.

With an ATR of $48, a move of $65 to $83 is less than two ordinary days. In the example, two normal losses cost $192 and leave $308 of the $500 limit, while the CPI fill plus one normal loss costs $290.40.

The maximum loss is fixed and never moves. On a $10,000 Classic account the floor is $9,000, so ten losses of $96 ($960) leave $40 of room. On a $10,000 Direct account the floor is $9,400, and six such losses ($576) leave $24.

News trading is allowed, so you can hold through CPI or a Fed decision, but plan for fills like the one above. Weekend holding is allowed too, with holding costs. Gold can reopen on Sunday evening well away from Friday's close: if you hold 6 ounces and it reopens $40 lower, the position is down $240 at once, almost half the $500 daily limit, and a stop inside that gap fills at the reopening price.

Leverage is chosen at purchase, from 1:10 to 1:500. It changes the margin a position needs, not the dollars per $1 move, so it does not change the sizing above. Higher leverage magnifies both gains and losses. The margin calculator shows the margin for a given size.

Common mistakes

• Copying a pip count from someone on a different platform. Turn every stop into dollars of price first.
• Copying a lot size. If one lot is 100 ounces, 1 lot with a $16 stop risks $1,600, more than three times the $500 daily limit on a $10,000 Classic account.
• Using stop distances from years ago. A $5 stop that once looked wide is a small fraction of an ordinary day at today's prices.
• Holding full size through 13:30 UK data or a 19:00 Fed decision without allowing for a stop that fills late.
• Forgetting the clock change. From 26 to 30 October 2026, US data comes out at 12:30 UK time.
• Reading every news headline as a gold signal. The dollar and real yields often explain a move better than the headline does.

Questions traders ask

Can I trade gold with $100?

On a personal account, $100 leaves little room. At an assumed 100 ounces per lot, 0.01 lot is one ounce, so a $16 stop risks $16, or 16% of the balance on one trade. A simulated account with a larger balance lets you size gold trades at 1% or less.

Is XAU/USD good for beginners?

Gold is widely traded and its main drivers can be followed in ordinary economic news, which helps a beginner. Its dollar moves are large next to a small account, though, and it can jump on US data. Start with the smallest size, size every trade from the stop, and keep a record of each one.

What is the gold-silver ratio?

The gold-silver ratio is the price of an ounce of gold divided by the price of an ounce of silver. With gold at 4,000 and silver at 50, the ratio is 80. Some traders watch it to judge whether one metal looks stretched against the other, though a high or low reading can last for years.

Next steps

The US30 guide applies the same sizing to a stock index, where index points replace dollars of price. Use the position size calculator to size each gold trade from your stop, and read the Classic and Direct rules for your account's limits.

The account sizes and routes are on the challenges page.