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XAU/USD is the price of one troy ounce of gold quoted in US dollars, and it is the most-traded way to access the gold market. The XAU code is the ISO standard for gold; pairing it with USD turns the metal into a tradable instrument that behaves like a currency pair. This guide takes you from what the pair is to placing your first trade.
What XAU/USD actually represents
When XAU/USD trades at 2,400, one ounce of gold costs 2,400 dollars. You are not buying physical metal; you are trading the price difference through a CFD or spot contract, which means you can go long if you expect gold to rise or short if you expect it to fall. For the background on the code itself, see our explainer on what XAU means.
How XAU/USD is priced and sized
Gold is quoted to two decimal places, and a one-dollar move is 100 pips. A standard lot is 100 ounces, so a one-dollar move on a standard lot is worth 100 dollars; a mini lot (10 ounces) is worth 10 dollars per dollar move. Position size, not gut feel, sets your risk: decide how many dollars you are willing to lose, divide by the stop distance, and that gives you the lot size.
Leverage on gold
Gold CFDs are leveraged, which lets a small deposit control a larger position. Under ESMA rules retail leverage on gold is capped at 20:1. Leverage multiplies gains and losses equally, so treat it as a tool, not a shortcut. The mechanics and the risks are covered in using leverage in gold trading.
Spreads, swaps and session timing
Two costs matter. The spread is the gap between buy and sell price, and on XAU/USD it widens during thin liquidity, especially around the Comex close. Swaps are the overnight financing cost of holding a position; swap-free accounts remove them. Trade the London and New York sessions, when spreads are tightest and gold is most active.
Your first XAU/USD trade, step by step
- Open and fund a regulated trading account, or start on a demo.
- Pick a direction from a strategy, not a hunch. Our gold trading strategies guide covers five.
- Set the lot size from your stop distance and risk percentage.
- Place the stop-loss beyond the nearest structure and a take-profit at a logical level.
- Record the trade and review it. Consistent journaling beats any single setup.
Where to trade XAU/USD
You need tight gold spreads, fast execution and solid charting. Volity offers XAU/USD and XAU/EUR with MetaTrader 4/5 and a proprietary platform, swap-free options, and gold alongside forex, stocks and crypto in one account. Compare the field in our best gold trading platform guide, then practise on a demo before going live.
Quick answer: To trade XAU/USD you trade the dollar price of one ounce of gold through a CFD or spot contract, going long or short. Size each position from your stop distance and risk percentage, use leverage cautiously (capped at 20:1 for retail), and trade the London and New York sessions when spreads are tightest. Practise on a demo account before risking real capital.
