XAU/USD in one paragraph
XAU/USD is the ticker symbol for gold priced in US dollars. XAU is the ISO 4217 currency code for one troy ounce of gold, and USD is the United States dollar. The price quoted (for example, 2,050.00) is how many US dollars one troy ounce of gold costs at that moment. Gold trades 23 hours a day, five days a week, with a brief daily settlement break.
Why XAU? Gold has a currency code
XAU is the ISO 4217 currency code for gold. ISO 4217 is the international standard that assigns three-letter codes to currencies (USD, EUR, GBP, JPY). It also covers the four precious metals: XAU for gold, XAG for silver, XPT for platinum, and XPD for palladium. The leading X marks them as non-national codes.
Gold gets a currency code because it trades like a currency. In the spot bullion market, banks and institutional desks quote XAU against fiat currencies the same way they quote EUR/USD or GBP/USD. One troy ounce of gold is the unit, and the price is the number of dollars (or other currency) per ounce.
That is why on MT5 and other trading platforms you see XAUUSD listed alongside EURUSD and USDJPY. Mechanically it behaves like a currency pair: you buy XAU and sell USD, or vice versa, with two-way quotes, spreads, and overnight swap.
Quick fact. XAU stands for the chemical symbol Au (gold) prefixed with X. XAG (silver) follows the same pattern using Ag. The X prefix is reserved by ISO 4217 for non-country units like precious metals and special-purpose codes.
How XAU/USD pricing works
The XAU/USD quote is the number of US dollars per one troy ounce of gold. One troy ounce equals 31.1034768 grams, slightly heavier than the standard avoirdupois ounce used for groceries (28.35 grams).
If XAU/USD is quoted at 2,050.00, one troy ounce of gold costs 2,050 US dollars. If the quote moves to 2,051.00, gold has risen by one dollar per ounce. The price prints with two decimal places on most retail platforms, so the smallest tick is 0.01 (one US cent per ounce).
On MT5 at LHFX, the contract size for XAUUSD is 100 troy ounces per standard lot. That means one full lot is exposure to 100 ounces of gold. At a price of 2,050, the notional value of one lot is 100 x 2,050 = $205,000. A 0.01 micro lot is one troy ounce of exposure, with notional of about $2,050.
Pip definitions vary by broker convention. On most MT5 servers including LHFX, a one-pip move on XAUUSD means a $1.00 change in the price (for example, 2,050.00 to 2,051.00). On 100 ounces (one standard lot) that is $100 of profit or loss per pip. Some brokers redefine a pip as $0.10 or $0.01; always check your symbol specifications inside MT5.
Worked example
You buy 0.10 lots of XAUUSD at 2,050.00 (10 troy ounces, notional roughly $20,500). Price rises to 2,060.00, a $10 move per ounce. Your profit is 10 ounces x $10 = $100. The same 10-dollar move against you would cost $100. Margin required at 1:500 leverage is roughly $41 (0.2% of notional).
What drives the XAU/USD price
Gold has no earnings, no yield, and no issuer. Its price is set by the balance between investment demand, central bank demand, and physical jewellery and industrial demand. A small number of macro factors dominate day to day moves.
US real interest rates (inverse)
Gold pays no yield, so it competes directly with US Treasuries. When real rates (nominal yield minus expected inflation) fall, holding gold has a lower opportunity cost and the price tends to rise. The 10-year US TIPS yield is one of the strongest single drivers of gold over multi-week horizons.
US dollar strength (inverse, see DXY)
Gold is priced in dollars globally. A stronger dollar makes the same gold ounce more expensive in every other currency, which dampens demand. Watch the US Dollar Index (DXY) intraday. Sharp DXY moves on FOMC days or non-farm payrolls typically produce mirror image moves in XAU/USD.
Central bank gold buying
Central banks (notably China, India, Turkey, Russia, Poland) have been net buyers of gold for over a decade, adding more than 1,000 tonnes per year in recent reporting. The World Gold Council publishes quarterly reserves data. Sustained official-sector buying provides a structural floor for gold.
Geopolitical risk
Gold rallies during military conflict, major sanctions events, and currency or banking-system instability. The reaction is usually sharpest on day one of a shock and fades as a new equilibrium is priced in. Weekend escalations regularly produce gap moves at Sunday open.
Inflation expectations
Gold is widely held as an inflation hedge. The link is more indirect than people assume: gold reacts more cleanly to real yields than to headline CPI. Still, sustained surprises in inflation data (US CPI, PCE, University of Michigan expectations) move gold reliably.
ETF flows (GLD and friends)
SPDR Gold Shares (GLD) is the largest physically-backed gold ETF. Daily tonnage held is published and tracked closely. Persistent ETF accumulation tightens the physical market; persistent outflows are a headwind. iShares Gold Trust (IAU) and European-listed gold ETFs add to the picture.
Asian physical demand (China and India)
China and India together account for over half of global physical gold and jewellery demand. Indian wedding-season buying (October to December) and Chinese Lunar New Year demand are seasonal. Premium over the London spot price in Shanghai and Mumbai is a useful real-time indicator of physical tightness.
When does XAU/USD trade?
Gold trades close to 23 hours a day, five days a week. The market opens Sunday around 5:00 PM ET (10:00 PM London) and closes Friday around 5:00 PM ET, with a short daily settlement break around 5:00 PM ET. Liquidity and volatility change by session.
Most retail XAU/USD volume happens during the London and New York sessions, with the heaviest activity in the overlap window. Asian-only hours are quieter, with tighter ranges but occasionally sharp moves on Chinese policy news or geopolitical headlines.
Roughly 6:00 PM to 3:00 AM ET. Quieter, narrower ranges. Watch for moves on Chinese data or PBoC statements.
Roughly 3:00 AM to 8:00 AM ET. Liquidity ramps up. The London bullion fixings (10:30 AM and 3:00 PM London) are reference prices for physical gold settlement.
Roughly 8:00 AM to 12:00 PM ET (1:00 PM to 5:00 PM London). The most liquid and most volatile window. Major US data releases (CPI, NFP, PCE) print at 8:30 AM ET.
Roughly 12:00 PM to 5:00 PM ET. FOMC announcements land at 2:00 PM ET. Gold often moves sharply on the statement and the press conference 30 minutes later.
XAU/USD CFD vs gold futures vs gold ETF
You can take a view on the gold price three main ways: a CFD on spot gold (XAU/USD), a futures contract (such as COMEX GC), or a gold ETF (such as GLD or IAU). They look similar but trade very differently.
| Product | Expiry | Smallest size | Access | Cost structure |
|---|---|---|---|---|
| XAU/USD CFD | None (spot, perpetual) | 0.01 lot (1 troy oz) | Any broker offering CFDs | Spread + commission + overnight swap |
| COMEX gold futures (GC) | Monthly, must roll | 1 contract = 100 oz | CME-enabled futures broker | Exchange fees + commission + roll cost |
| Gold ETF (GLD, IAU) | None (equity wrapper) | 1 share | Any stock broker | Bid-ask + management fee 0.25 to 0.40% annual |
For active trading with leverage, the XAU/USD CFD is the most flexible choice: no expiry to manage, fractional sizing down to one troy ounce, and 23-hour access. Futures suit larger institutional size and have lower carrying cost above a certain notional. ETFs suit buy-and-hold investors who want long-only equity-account exposure without leverage.
Trading XAU/USD at LHFX
LHFX offers XAU/USD on MT5 with STP/ECN execution and no dealing desk. The specifications are visible inside MT5 under Market Watch, Symbols, XAUUSD.
Up to 1:500 on XAU/USD. Most active traders use far less effective leverage.
$3 per side ($6 round-trip) on the Standard account, applied per standard lot.
MetaTrader 5 on Windows, Mac, web, iOS, and Android. LHFX is a direct MetaQuotes licensee.
STP/ECN. Orders route to aggregated bank and non-bank liquidity, not an in-house dealing desk.
Sunday 5:00 PM ET to Friday 5:00 PM ET, with a short daily break around 5:00 PM ET.
For the full instrument page including current spread snapshots and contract specifications, see the XAU/USD instrument page. For commission and spread details across all instruments, see spreads and fees, and for the full leverage policy by instrument see leverage.
Risks of trading XAU/USD
Gold is liquid and well-understood, but it is not a low-risk instrument. The combination of moderate daily volatility, weekend gap risk, and high available leverage means losses can compound fast.
Daily volatility
Typical daily ranges on XAU/USD are 1 to 2% of price. On FOMC days, US CPI releases, and geopolitical shocks, 3% or larger daily moves are common. A 2% adverse move on a fully leveraged position at 1:500 wipes out ten times the deposited margin.
Weekend and session gaps
Gold trades close to 23 hours a day but is closed over the weekend. Weekend geopolitical events (sanctions, conflict escalations, central bank statements) regularly produce gap opens of 1 to 3% on Sunday evening. Stop losses cannot protect you across a closed market.
Leverage amplifies both sides
1:500 leverage on XAU/USD means a 0.2% move can wipe out your margin on that position. The same mechanism that makes a 1% favourable move return 500% on margin makes a 1% adverse move a total loss. Size positions to your account, not to the leverage cap.
Single-instrument concentration
Holding only XAU/USD exposes you to one macro theme (real yields, dollar, geopolitical risk). Diversification across uncorrelated instruments reduces the impact of any single thesis being wrong.
Risk disclosure: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Never trade with money you cannot afford to lose.