XAU/USD (gold): a guide to gold against the dollar

What it is

XAU/USD is the price of one troy ounce of gold in US dollars. It isn't a true currency pair but is traded as one at forex brokers. It's one of the most watched instruments because it is very volatile.

What moves it

• Real interest rates and Fed policy: gold pays no interest, so higher rates tend to weigh on the price
• Dollar strength (a correlation that is often inverse)
• Geopolitical tension and risk aversion (gold as a haven)
• Inflation and central bank expectations

Contract and point value

At many brokers 1 lot equals 100 ounces: a $1 move in price is worth $100 per lot. That is a much higher value than a forex pair, so size must be calculated carefully (with 0.01 lots a $10 move is worth $10). Check your broker's specifications.

When to trade it

The most active moments are the London and New York sessions, especially around US data (NFP, CPI, Fed). The spread widens a lot in the minutes of news.

Risks

A wide daily range, gaps and fast moves: stops that are too tight are hit easily. Use the ATR for sizing and reduce size compared with forex pairs.

Live chart