Gold Trading Explained: How XAU/USD Actually Works
What you are really trading when you trade XAU/USD, why gold moves, how contracts and pip values work, and what makes gold different from other markets.
XAU/USD is the price of one troy ounce of gold quoted in US dollars. Trading it through a broker means trading a contract on that price rather than taking delivery of metal.
Why gold moves
- Real interest rates — gold pays no yield, so it competes with bonds
- The US dollar — gold is priced in dollars, so dollar strength usually pressures gold
- Inflation expectations — gold is widely held as an inflation hedge
- Central bank buying — a structural source of demand
- Risk sentiment — geopolitical stress tends to drive flows into gold
What makes gold attractive to systematic strategies
Gold trends cleanly, is extremely liquid, trades nearly 24 hours a day on weekdays, and has a well-behaved volatility profile compared with individual equities or small-cap crypto. That is why Sonic AI trades XAU/USD exclusively rather than spreading across dozens of pairs.
Contract sizes and pip value
| Lot size | Ounces | Approx. value of a $1 move |
|---|---|---|
| 1.00 standard | 100 oz | $100 |
| 0.10 mini | 10 oz | $10 |
| 0.01 micro | 1 oz | $1 |
Gold moves in dollars, not in traditional forex pips, which is why gold position sizing needs its own arithmetic. See Position sizing explained.
Where to go next
New to the market entirely? Start with Gold trading for beginners. Want to see a live gold strategy's verified numbers? They are on Performance.
Frequently asked questions
Gold is liquid and well-documented, which helps, but it is also volatile and usually traded with leverage. It is approachable to learn and unforgiving if position sizing is ignored.
No. You are trading a contract on the gold price. There is no delivery of metal.
The Sonic AI Research Desk documents how the XAU/USD strategy behaves in live markets, using the linked public MyFXBook account as its source for Sonic AI historical performance figures. Market data, broker terms and illustrative calculations are sourced and labelled separately.
Put the theory to work
Open an account from $10 and copy the same verified gold strategy these guides analyse — or talk it through first.
