XAUUSD is the price of one troy ounce of gold quoted in US dollars. "XAU" is the international code for gold and "USD" is the US dollar, so a quote of 4,012.50 means one ounce of gold costs $4,012.50. Traders buy XAUUSD when they expect gold to rise against the dollar and sell it when they expect it to fall.
What "XAU" and "USD" mean
Currency pairs use three-letter ISO 4217 codes. Precious metals have their own codes in that standard, starting with "X": XAU for gold, XAG for silver, XPT for platinum. Gold is treated like a currency because, historically, it was money — and it still trades in the same global over-the-counter market as the major currency pairs.
The unit is the troy ounce, about 31.1 grams — slightly heavier than the everyday (avoirdupois) ounce of 28.35 grams. Every gold price you see in the market is per troy ounce unless stated otherwise.
How to read an XAUUSD quote
- Price: 4,012.50 means one troy ounce costs $4,012.50.
- Bid and ask: your broker shows two prices, e.g. 4,012.30 / 4,012.60. You sell at the lower bid and buy at the higher ask; the gap is the spread, a trading cost.
- Direction: if XAUUSD rises, gold is getting more expensive in dollars — either gold is strengthening, the dollar is weakening, or both.
XAUUSD vs other ways to trade gold
| Instrument | What you hold | Size | Hours |
|---|---|---|---|
| Spot XAUUSD (forex/CFD broker) | A position on the gold price, usually leveraged | 1 lot = 100 oz at most brokers | ~23 h, Sun–Fri |
| COMEX gold futures (GC) | An exchange-traded contract with an expiry date | 100 oz (micro MGC: 10 oz) | ~23 h, Sun–Fri |
| Gold ETFs (e.g. GLD) | Shares backed by gold held in a vault | Each share = a fraction of an ounce | Stock market hours |
| Physical bullion | Coins or bars you own outright | Any size | Dealer hours; you pay a premium to buy |
This course focuses on spot XAUUSD, the version most retail traders use. The same price drivers move all four, so almost everything here also applies to futures and ETFs.
Why traders choose gold
- Liquidity: gold is one of the most heavily traded markets in the world, so spreads are usually tight during active hours.
- Movement: XAUUSD regularly moves tens of dollars in a day, which creates opportunity — and risk.
- Clear drivers: gold reacts to a short list of macro forces — interest rates, the dollar, inflation and risk sentiment — covered in Lesson 4.
- Diversification: gold often behaves differently from stocks, especially during market stress.
The risks to understand first
Spot gold is usually traded with leverage, which magnifies both gains and losses. Gold can move sharply on economic data, prices can gap at the Sunday open, and spreads widen around news and at the daily rollover. None of this makes gold unusually dangerous — but it means position size and stop placement matter more than picking direction. Lesson 3 shows exactly how to size a gold trade.
Key takeaways
- XAUUSD = the price of one troy ounce (≈31.1 g) of gold in US dollars.
- You buy at the ask and sell at the bid; the difference is the spread.
- Spot XAUUSD, COMEX futures, ETFs and bullion all follow the same gold price.
- Leverage makes position sizing the first skill to learn.
Check your understanding
✓ Lesson complete