Gold (XAU/USD) Basics: Volatility, Sessions and Position Sizing

Why gold behaves differently

Gold is quoted against the US dollar and is often sensitive to interest-rate expectations, the dollar's strength and risk sentiment. It can move many dollars in minutes around major news.

Contract size and pip conventions

Brokers differ, so always check your broker's contract specification. A common setup is:

• 1 standard lot = 100 troy ounces
• Price quoted to two decimals; some brokers call $0.01 a "point" and $0.10 a "pip"

Because conventions vary, use the Pip Value calculator with your broker's exact contract size and tick size.

Practical considerations

• Wider stops are often needed, which means smaller lot sizes for the same risk.
• Spreads can widen around news and session opens.
• Session overlap (London/New York) usually brings the most liquidity.

Checklist before a gold trade

1. Check the economic calendar for high-impact USD news.
2. Define the stop from structure, not from a fixed number.
3. Size the position from your risk, not from how confident you feel.

Education only. Trading leveraged products involves high risk.