1} Is XAUUSD traded on the Exchange ? Or is it like forex traded in the unregulated marketplace ?
2} I am also bit confused about this whole XAUUSD - I looked at fxpro and other websites but cannot figure out the lot size etc. Below is the reason -
On the chart, the price says $1250. But what is that ? Is it 0.1 of the lot ? Or 0.01 of the lot - Looks like 0.01 of the lot. This is confusing compared to the EUR/USD or something because if we trade 0.25 lot of EUR/USD each pip movement would be around $2.5 P/L.
But in XAUUSD at 0.25 lot produces $50 P/L for a $2 movement in price of XAUUSD.
I just mean to say that the equal size lots seem produce more $ P/L in similar time frame for XAUUSD compared to EUR/USD, even though .25 lot of XAUUSD is around $30000 and .25 lot of EUR /USD is $25000 - similar value - not a huge difference.
Is this observation correct ? Or am I doing something wrong ?
XAUUSD= Gold and the price is about 1250 an ounce. Now typically gold is traded on an exchange however some forex brokers offer it on there plattform. It is my understanding that if a broker offers you a spot price then the broker is acting as a market maker. This could be a conflict of interest depending on your broker.
As far as your math it looks off my brain it not functioning to try to explain the aspect of it
Hi Element,
Gold is traded in troy ounces (XAU or Oz.) and the current price for 1 Oz is around 1250 USD. What you need to have in mind is the contract size of the instrument you trade as some brokers may have different specifications. Basically Gold has no fixed pip value it depends on how much Oz. is in one lot. The pip by gold is 0000.0[B]1[/B]. If the contract size of you broker’s gold symbol is 10 Oz. for 1 lot (1.00) then 1 pip is 0.10 USD per pip. If the contract size is 100 Oz. for 1 lot (1.00) then 1 pips is 1.00 USD per pip.
So when on the chart the price says $1250 if the brokers symbol is with contract size 10 Oz. for 1 lot, those $1250 = 0.1 of lot. Respectively if the contract size is 100 Oz. for 1 lot, $1250 = 0.01 of lot
For EURUSD you have the pip here: 0.000[B]1[/B]0. Then for 1 standard lot of 100 000 you will get 10 USD profit per pip. And you are correct: with 0.25 lot EURUSD you will get $2.5 P/L.
In your case with 0.25 lot for Gold and 2 USD change in price (=200 pips) you said you get 50 USD which means you trade with contract size 100 Oz (200 pips * $1.00 * 0.25 lot = $50).
I hope you find that useful
Cheers
I would think that gold traded on exchange is gold futures correct ? And the minimum trade size would be 1 lot or 100 Oz which would cost 125000 $ and a movement of 1 $ would cause around 125 dollars movement in P/L - is the understanding correct ?
Yes correct if 1 lot size for gold is 100 and price for 1 oz is 1250 then its $125000 for standard lot. If price falls to 1240 then the loss us 1000 bucks (125000-124000), then $1 move in price will cost you $100, 1 pip - $1
the contract most retail brokers offer is CFD.
Unless my broker is different to everyone else’s, you dont buy Gold in lots or portions of lots. Its priced per ounce and you buy in whole ounces, 1=1 ounce, 2=2 ounces, etc.
Price wise its quite volatile, I’ve had trades move 100’s of pips for and against me, so you need deep pockets
Indeed the price on the chart (let’s stick to 1250,00) is the price for 1 troy ounce (oz.), e.g. if XAUUSD is quoted at $1250,00, this means for every one ounce of gold you trade, you would have to pay $1250,00 (of course using leverage trading the needed margin is way lower depending on the specification of the broker).
As most of the brokers do not offer physical delivery or delivery to safe deposit box (in London or in the USA for example) they offer spot gold, e.g. the price at which gold could be transacted and delivered on right now. Thus, quotes for spot metals are represented in the same way as quotes for currency pairs. For example, spot gold traded against the US dollar is XAU/USD and trading takes place in ‘lots’. A single lot of gold is 10oz or 100oz (or 1oz) again depending on the specifications of the broker and whether he offers just standard gold – 10oz per lot with 1.00 lot minimum lot size or also mini gold – 100oz per lot where you can trade 0,01 as a minimum lot size.
