This page covers where the gold price comes from, what moves it and what a move costs you at different trade sizes. It also explains the retail leverage cap on gold when the company that opens your account is regulated in the EU, the UK or Australia. Then it covers the cost of holding a trade overnight, gold trading hours and how silver differs.
Key points
XAU/USDshows the price of one troy ounce of gold in US dollars. The code XAU is in the same list as currency codes and is the standard way to identify gold (ISO 4217 list).- The gold price comes from two sources: the London bullion market, where banks deal directly with each other, and gold futures in New York. Your provider uses them to build its CFD price.
- Retail leverage on gold is capped at 20:1 when the company that opens your account is regulated in the EU, the UK or Australia. ESMA, the EU’s markets regulator, set the EU cap. That 20:1 cap means the margin you put up is 5 % (ESMA Decision (EU) 2018/796, FCA PS19/18, ASIC order).
- Before you trade, check how many ounces make up one lot at your provider. Your profit or loss on a gold trade equals the size in ounces times the move in dollars.
- Gold trades almost around the clock from Sunday evening to Friday evening, New York time, apart from a short daily break.
What is XAU/USD?
XAU/USD is the market’s shorthand for the price of gold in US dollars. XAU is gold’s code under ISO 4217, the international list of currency codes, and XAG is silver’s (ISO 4217 list).
The bullion market’s unit is the troy ounce, so the price is quoted per troy ounce. A troy ounce is a little heavier than an everyday ounce. Platforms display XAU/USD like a currency pair. So you see a price to sell at and a higher price to buy at. The gap between them is the spread, a cost you pay on every trade (costs and fees).
With a gold CFD you can trade in either direction. You buy when you expect the price will rise, and you sell when you expect it will fall. Selling first is known as going short (how a trade works). Either way your counterparty, the other side of the contract, is your provider and not a gold market.
Where the gold price comes from
The gold price you see on a CFD platform comes from two wholesale markets that trade side by side. Your provider takes prices from those markets and adds its own spread.
The London bullion market
The wholesale market for physical gold is centred on London. Trades there are over the counter, meaning two parties deal directly with no exchange in between (LBMA, About Loco London). Precious metals trade internationally on a 24-hour basis (LBMA, About Loco London). Gold and silver held in London vaults go by the trade name “Loco London”. The standard bar weighs about 400 troy ounces (LBMA, About Good Delivery).
An auction sets the LBMA Gold Price, a benchmark, twice each working day. The auctions begin at 10:30 and 15:00 London time, and ICE Benchmark Administration runs them (LBMA Precious Metal Prices). Between those auctions, the price you see changing every second is the spot price, the running price for immediate delivery.
COMEX gold futures
In the United States, COMEX, which belongs to CME Group, lists the most watched gold futures contract. A futures contract is an exchange-traded agreement to buy or sell at a set price on a later date. One COMEX gold contract covers 100 troy ounces, and its quote is in US dollars and cents per troy ounce. The smallest price step is 0.10 dollars an ounce, which works out to $10.00 a contract (CME Group contract specs).
The price on your gold CFD
The price on your gold CFD is whatever your provider quotes, and it’s built from one of those two markets. Most gold CFDs track spot and have no end date. Some follow a named futures contract and expire or roll over with it. That changes how you’re charged for holding the trade (commodities trading). Which kind you have is set out in the contract details on your platform.
What moves the gold price
Gold moves for different reasons from a share or a barrel of oil, since it pays no interest and very little of it is used up. Four drivers explain most of what you’ll read about the gold price.
- Real interest rates
- Real interest rates are interest rates after inflation. Gold pays nothing, so when safe bonds pay more after inflation, holding gold costs you more in lost income and the price tends to fall. From 2001 on, long-term real rates and pessimism about the economy were the dominant factors, according to economists at the Chicago branch of the Federal Reserve, the US central bank (Chicago Fed Letter 464).
- The US dollar
- Gold is priced in dollars, so the dollar’s own value is built into
XAU/USD. When the dollar weakens against other currencies, the same ounce costs more dollars to buy. The World Gold Council’s model of gold returns includes currencies and interest rates as the two parts of gold’s “opportunity cost” (Gold Return Attribution Model). - Central-bank buying
- Central banks keep gold in their reserves, and they have been large buyers. In 2024 they bought 1,044.6 tonnes. That was the third year in a row above 1,000 tonnes (World Gold Council, Gold Demand Trends 2024).
- US data and rate decisions
- Scheduled US releases shift gold because they alter interest-rate expectations in the markets. One of the most watched is the monthly jobs report from the Bureau of Labor Statistics, called non-farm payrolls or NFP (Employment Situation). Federal Reserve rate decisions are another (FOMC meeting calendar). Gold moves on the surprise in a number, and the first move often reverses within minutes (fundamental analysis).
How to trade gold as a CFD: one trade, step by step
Illustrative figures: a made-up example, not a forecast or a quote.
Trading gold as a CFD follows the same steps as any other CFD trade. The numbers below are made up to show the sums, and they aren’t real prices and they aren’t real charges.
- Read the quote Say your platform shows gold at 3,000.00 to sell. Your platform also shows 3,000.30 to buy. The spread is 0.30 dollars an ounce. If you buy and sell straight away, you lose that gap.
- Choose the size in ounces Say you buy 10 ounces. Many platforms display that as 0.10 lots. The full value of the trade is its notional value, which comes to 10 × 3,000.30, or 30,003 dollars.
- Put up the margin Say your provider’s gold margin rate is 5 %. It will hold 5 % of 30,003 dollars from your account. That comes to about 1,500 dollars. This margin is a deposit, not the most you can lose.
- Set the exit before you open Say you place a stop-loss, an order that closes the trade at a worse price you choose, 15 dollars below your entry. On 10 ounces that’s a planned loss of 150 dollars. In a fast market the order can fill at a worse price. That difference is called slippage.
- Hold or close If the sell price climbs to 3,020.30, you’re up 20 dollars an ounce, or 200 dollars. If it drops to your stop, you’re down 150 dollars. If you hold past the daily cut-off, your provider adds a financing charge each night.
Gold contract size and what a move costs
Worked arithmetic: the numbers follow from the formula given in this section.
The contract size decides what each dollar move in gold is worth to you. Many platforms define one lot of gold as 100 ounces. That matches the size of one futures contract. Providers differ in how they set the lot, so check the contract details on your platform. The sum is always ounces multiplied by the move in dollars.
| Trade size | Often shown as | 1 dollar move | 10 dollar move | 50 dollar move |
|---|---|---|---|---|
| 1 ounce | 0.01 lots | $1 | $10 | $50 |
| 10 ounces | 0.10 lots | $10 | $100 | $500 |
| 100 ounces | 1 lot | $100 | $1,000 | $5,000 |
Gold can move tens of dollars in a day, so the size you pick matters more than the leverage on offer. The pips and lots page lists lot sizes for different markets, and risk management explains how to calculate a size based on the loss you’re willing to take.
Gold leverage: the 20:1 retail cap
If the company that opens your account is regulated in the EU, the UK or Australia, gold leverage for retail clients, meaning ordinary individual traders, is capped at 20:1. You put up at least 5 % of the trade’s full value as margin (ESMA Decision (EU) 2018/796, FCA PS19/18, ASIC order). Those same rules cap other commodities, including silver, at 10:1 (ESMA press release, 27 March 2018).
On a buy trade at the cap, a 5 % drop in gold wipes out the whole margin (ESMA Decision (EU) 2018/796). Under those rules the margin close-out rule has your provider start closing trades before that point, and negative balance protection stops a retail account going below zero.
Global companies, regulated outside those rules, promote significantly higher leverage on gold. The comparison tables display the gold leverage figures published by each listed broker, one company at a time. Maximum leverage details what you sacrifice to access higher levels.
Overnight financing and swap rates on gold
Overnight financing, also called the swap, is a daily charge for holding a gold CFD after your provider’s cut-off time. You’ve only put up the margin, so your provider is lending you the rest of the trade’s value and charges interest on the full amount.
Each provider sets its own swap rates for XAU/USD and publishes them on its platform or website. A buy trade on spot gold normally pays the charge. A sell trade may pay less or receive a small credit, depending on interest rates and the provider’s markup. To cover the weekend, many providers charge three nights at once on one day of the week (costs and fees).
A gold CFD based on a futures contract works differently. It usually has no nightly charge, because the cost of holding is already inside the futures price (commodities trading). Instead, the contract rolls to a new month. For a trade held for weeks, financing can cost more than the spread (the financing formula).
Gold trading hours: when the market opens and closes
Your provider sets the gold trading hours on your CFD platform. Most follow the underlying markets closely. The table shows the hours of those markets.
| Market | Hours | What it means for a gold CFD |
|---|---|---|
| COMEX gold futures on CME Globex | Sunday to Friday, 6:00 p.m. to 5:00 p.m. New York time, with a 60-minute break each day from 5:00 p.m. | Most gold CFDs open on Sunday evening, pause once a day and close on Friday evening, New York time |
| London bullion market | Dealing between banks around the clock on working days | Trading is busiest when London and New York are both open |
| LBMA Gold Price auctions | 10:30 and 15:00 London time | Benchmark prices are set, and activity often picks up around them |
| Weekend | Closed | The price can reopen on Sunday at a different level from Friday’s close |
Around the daily break and at the Sunday open, when few firms are quoting, spreads on gold are usually widest. If the price jumps between Friday’s close and Sunday’s open, that jump is a gap and a stop-loss fills at the first price available after it. Public holidays shorten the hours. The trading hours page sets out the times for every market.
Gold in euros, pounds and Australian dollars
Gold in euros, pounds or Australian dollars comes from the dollar gold price converted at the current exchange rate. Platforms show these as XAU/EUR, XAU/GBP and XAU/AUD.
Each of those prices shifts for two reasons at once, gold itself and the currency against the dollar. Say gold rises in dollars while the euro rises by the same share, and XAU/EUR stays put. A trade in XAU/EUR is a view on gold and on the euro together (forex trading).
How silver and platinum differ from gold
Silver trades the same way as gold. The metal trades under the code XAG/USD and is priced in dollars per troy ounce (ISO 4217 list). London sets one silver benchmark a day through an auction that starts at 12:00 noon (LBMA Precious Metal Prices).
When you shift from gold to silver or platinum, three things change. The retail leverage cap at an EU, UK or Australian company becomes 10:1, because only gold is carved out from the other commodities (ESMA press release, 27 March 2018, ASIC order). A large part of the demand for both metals comes from industry, so their prices follow the business cycle too. And because their markets are smaller than gold’s, price swings are usually bigger in percentage terms and spreads are wider. The caps across metals, energy and farm goods are compared on the commodities trading page.
Risk warning
Gold’s safe reputation doesn’t carry over to a leveraged gold trade
Gold has a reputation as a safe place for savings. A leveraged gold CFD is a different thing from a bar in a vault, though. At the 20:1 retail cap of an EU, UK or Australian company, a 5 % move against you takes the whole margin (ESMA Decision (EU) 2018/796). Gold can travel a good part of that distance in a few days. Most retail CFD accounts lose money. ESMA reported in 2018 that national regulators found that between 74 % and 89 % of them did (press release, 27 March 2018). Nothing about gold makes those odds better.
Gold trading questions
Gold trading questions people search for most often each get an answer that stands on its own.
What does XAUUSD mean?
XAUUSD stands for the price of one troy ounce of gold in US dollars. XAU is the international code for gold, and USD is the code for the dollar (ISO 4217 list). On a CFD platform it’s quoted like a currency pair, with a buy price and a sell price.
How do you trade gold online?
Most people who trade gold online use a CFD. A CFD is a contract with a provider that pays the difference between the opening and closing price. You pick a size in ounces or lots and put up margin. You can buy or sell. No gold changes hands. Other ways to trade gold include futures, exchange-traded funds and physical bullion, and each has its own costs.
What time does gold trading open and close?
Gold futures trading hours begin on Sunday at 6:00 p.m. New York time and run until Friday at 5:00 p.m., with a 60-minute break each day from 5:00 p.m. (CME Group contract specs). Most gold CFDs track a similar schedule. The hours that apply to your account are your provider’s own schedule.
How much is one lot of gold?
One lot of gold is 100 troy ounces on many platforms, and that size matches the COMEX futures contract (CME Group contract specs). Providers can define a lot differently, so the contract details on your platform are what count. When the lot is 100 ounces, a one-dollar move in gold is worth $100.
What leverage can you get on gold?
Leverage on gold for retail clients is capped at 20:1 when the company that opens your account is regulated in the EU, the UK or Australia. That cap means a margin of 5 % (ESMA Decision (EU) 2018/796, FCA PS19/18, ASIC order). A global company in the same group, licensed elsewhere, may offer more. Higher leverage doesn’t change what gold does. Leverage only changes how fast a move empties your account.
How does NFP affect gold?
NFP, the monthly US jobs report, affects gold by shifting what markets anticipate for US interest rates (Employment Situation). A much stronger report than expected tends to lift the dollar and raise rate expectations, which usually weighs on gold. A weak report tends to do the opposite. The reaction isn’t reliable. Spreads widen around the release and the first move often reverses.
Sources
The original documents this page cites, in the order they first appear.
- ISO 4217 List One: current currency and funds code list, SIX, ISO 4217 Maintenance Agency
- European Securities and Markets Authority, ESMA
- ESMA Decision (EU) 2018/796 of 22 May 2018 to temporarily restrict contracts for differences in the Union, Official Journal of the European Union (EUR-Lex), 2018-05-22
- PS19/18: Restricting contract for difference products sold to retail clients, FCA, 2019-07-01
- 20-254MR ASIC product intervention order strengthens CFD protections, ASIC, 2020-10-23
- About Loco London, LBMA
- About Good Delivery, LBMA
- LBMA Precious Metal Prices, LBMA
- Gold Futures Contract Specs, CME Group
- Board of Governors of the Federal Reserve System, Federal Reserve
- What Drives Gold Prices? (Chicago Fed Letter No. 464), Federal Reserve Bank of Chicago, 2021-11-01
- Gold Return Attribution Model, World Gold Council
- Gold Demand Trends: Full Year 2024, World Gold Council, 2025-02-05
- U.S. Bureau of Labor Statistics, BLS
- Employment Situation, U.S. Bureau of Labor Statistics
- Meeting calendars and information (FOMC), Federal Reserve
- ESMA agrees to prohibit binary options and restrict CFDs to protect retail investors, ESMA, 2018-03-27