How to Trade Gold (XAU/USD): A Complete Beginner's Guide

Gold is one of the most traded markets in the world and one of the most popular with retail traders. It trends well, reacts clearly to news and is available at almost every broker. It is also fast: a normal day can move gold several times more than a major currency pair. This guide covers what you need to know before you trade it.

What XAU/USD means

XAU is the code for one troy ounce of gold, and USD is the US dollar. A price of 2,400 means one ounce costs $2,400. When you buy XAU/USD you profit if gold rises against the dollar; when you sell, you profit if it falls.

Gold is traded as spot CFDs at forex brokers, as futures on exchanges such as COMEX, and through gold ETFs. This guide focuses on XAU/USD at a broker, the way most retail traders access it.

Contract size, pips and money per move

At most brokers:

• 1 lot = 100 ounces
• a $1 move in price = $100 per lot
• a common pip definition is $0.10, worth $10 per lot

So if gold moves from 2,400 to 2,415 and you hold 0.10 lots, the move is worth 15 × 100 × 0.10 = $150. Some brokers use different contract sizes, so check your platform before trading.

When gold moves most

Gold trades almost 24 hours a day on weekdays, but its activity follows the big financial centres:

• Asian session: usually the quietest, with ranges that often get broken later.
• London open: volume rises and the first real moves of the day often start.
• New York session: the busiest time, especially around 8:30 New York time when US data such as jobs and inflation is released, and in the afternoon around Federal Reserve announcements.

For most traders the London and New York overlap gives the best combination of movement and tight spreads.

What moves the gold price

Gold does not pay interest and has no earnings, so its price is driven by the big forces around it:

• US real interest rates. When inflation-adjusted yields fall, holding gold costs less in lost interest and gold tends to rise. When real yields rise, gold often struggles.
• The US dollar. Gold is priced in dollars, so a weaker dollar usually supports gold and a stronger dollar weighs on it.
• Fear and uncertainty. Wars, banking stress and market crashes often send money into gold as a safe haven.
• Central bank buying. Central banks have been large buyers of gold in recent years, a steady source of demand.
• US data and the Fed. Jobs reports, inflation numbers and Fed decisions change expectations for interest rates, and gold reacts within seconds.

Our guide on why gold moves goes deeper into each driver.

A simple framework to trade gold

1. Read the trend on the daily and 4-hour charts. Is gold making higher highs and higher lows, or the opposite?
2. Mark the key zones: recent swing highs and lows, round numbers like 2,400 or 2,500, and previous breakout levels.
3. Check the calendar. Know when US jobs, inflation and Fed events are due. Either stay flat, or reduce your size and widen your stop.
4. Wait for price to come to your zone and show a reaction, such as a rejection candle or a break and retest.
5. Size the trade from the stop loss. Gold's moves are large, so the lot size needs to be smaller than you would use on EUR/USD for the same risk.

Risk management is more important on gold

Gold can move $20 to $40 in minutes on big news. A trader who uses the same 0.5 lots they use on EUR/USD can lose ten times more than expected. Some rules that help:

• risk a fixed 0.5% to 1% of the account per trade
• place the stop beyond a real level, not a fixed number of dollars
• avoid holding large positions through major US data unless that is your plan
• watch the spread, which widens around news and at the daily rollover

Gold deep analysis in Alice

The Gold Deep Analysis in the Alice app combines everything above into one daily verdict: technicals on every timeframe, the dollar index, US yields, silver and stocks, upcoming high-impact events with what each outcome usually means for gold, how gold reacted to recent releases, live headlines and a trade plan with entry, stop and targets. It is part of Elite, with a 7-day free trial for every account.

Frequently asked questions

This guide is for education only and is not financial advice. Trading involves a high risk of loss. Test any method on a demo account first and never risk money you cannot afford to lose.