This is the least interesting lesson in the section and the one most likely to save your account. Gold specifications vary between brokers in ways currency pairs do not, and a trader who assumes rather than checks can be risking ten times what they calculated without any warning from the platform.
The standard contract
One standard lot of gold is normally 100 troy ounces, matching the COMEX futures contract.
| Lot size | Ounces | Value per $1 move |
|---|---|---|
| 1.00 (standard) | 100 | $100 |
| 0.10 (mini) | 10 | $10 |
| 0.01 (micro) | 1 | $1 |
This is the cleanest way to think about gold sizing: a one dollar move in the gold price is worth $100 per standard lot. Everything else follows from that.
Some brokers use a different contract size — 10 ounces per lot is occasionally seen. Confirm yours rather than assuming.
The pip problem
The detail that causes the most errors.
There is no industry standard for what a gold pip is. Three conventions are common:
Gold quoted 2350.45
Convention A — pip = $0.01
100 pips = $1.00 move
1 pip on a standard lot = $1
Convention B — pip = $0.10
10 pips = $1.00 move
1 pip on a standard lot = $10
Convention C — pip = $1.00
1 pip = $1.00 move
1 pip on a standard lot = $100
A “50 pip stop” means a $0.50 move, a $5 move, or a $50 move depending on which convention your broker uses. The difference between the extremes is a factor of one hundred.
Open a 0.01 lot position on gold. Note your floating profit or loss. When the price has moved a visible amount, note it again and compare against the price change. If a $1.00 price move produced $1.00 of profit or loss on 0.01 lots, your contract is 100 ounces and you can calculate everything from there. Do this once, write the result down, and never guess again.
Calculating position size on gold
Work in dollars of price movement rather than pips. It removes the ambiguity entirely.
Account: $5,000
Risk: 1% = $50
Entry: 2350.00
Stop: 2335.00
Distance: $15.00 of price movement
Value per $1 move per lot = $100
Risk per standard lot = 15 × 100 = $1,500
Position = $50 ÷ $1,500 = 0.033 lots
Round down to 0.03 lots
Note the result. A $5,000 account risking 1% on a $15 gold stop can hold 0.03 lots. That is a small position, and it is the correct one.
Traders who find this discouraging and round up to 0.10 lots are risking $150 on a $5,000 account — 3% — which is how gold accounts deteriorate quickly.
The Lot Size calculator does this arithmetic directly. Enter your account, risk percentage and stop distance, and it returns the position size. For gold this matters more than for currencies, because the mental arithmetic is less familiar and the cost of error is higher.
Margin on gold
Margin requirements for gold are typically higher than for major currency pairs, reflecting the higher volatility.
Where a major pair might require 1% margin (100:1 leverage), gold commonly requires more. The exact figure depends on your broker and jurisdiction.
Gold at 2350, 1 standard lot = $235,000 notional
At 100:1 leverage → $2,350 margin
At 50:1 leverage → $4,700 margin
At 20:1 leverage → $11,750 margin
Two points worth holding.
Margin is not risk. The margin figure tells you what is held as collateral. Your actual risk is the stop distance multiplied by position size, which is usually far smaller — or far larger if you have no stop.
Gold positions consume margin quickly. A few gold positions can restrict your free margin considerably more than the equivalent number of currency positions. The Margin calculator confirms the requirement before you open.
Spread on gold
Gold spreads are wider than major currency pairs and vary considerably more between brokers and across the day.
What affects them:
Session. Tightest during the London–New York overlap, widest during Asian hours and around the daily break.
News. Spreads widen dramatically around US releases — sometimes by several multiples.
Volatility. Unstable periods produce persistently wider spreads.
The practical implication for short-term traders: a strategy targeting small gold moves can be uneconomic once spread is accounted for. Calculate the spread as a percentage of your typical target before committing to an approach.
Swap on gold
Gold positions held overnight incur a swap charge or credit, as with currency pairs.
Gold swap is frequently negative on both sides, meaning you pay to hold regardless of direction. This reflects the storage and financing costs embedded in the contract.
For intraday traders this is irrelevant. For swing traders holding gold for a week or more, it accumulates and is worth checking in your platform’s contract specifications before entering.
Note also that swap is typically charged at triple rate on one day of the week to account for the weekend.
Symbol naming
A small detail that matters for anyone using automation.
Brokers name gold differently: XAUUSD, GOLD, XAUUSD.raw, XAUUSD.pro, GOLDmicro and other variations all appear.
This causes problems when a signal specifies one symbol and your platform uses another. Copy tools that handle symbol variation automatically avoid this — Telegram Trade Linker detects symbol naming without requiring manual configuration, which removes a category of error that otherwise appears at exactly the wrong moment.
If you are entering manually, simply confirm you are on the right symbol before trading. Some brokers offer several gold instruments with different specifications.
A pre-trade checklist for gold
ONE TIME (per broker)
Contract size in ounces
Value of a $1 move per lot
Margin requirement
Typical spread by session
Swap rates both directions
Daily break time
Exact symbol name
EVERY TRADE
Stop distance in dollars of price
Position size from that distance
Margin available
US calendar clear
The one-time list takes fifteen minutes and is written down once. The per-trade list takes under a minute with a calculator.
What to do next
The next lesson covers gold trading sessions — when gold moves, how its character changes through the day, and which windows suit which approaches.
Frequently asked questions
What is one lot of gold?
Normally 100 troy ounces, matching the COMEX futures contract. This means a $1 move in the gold price is worth $100 per standard lot. Some brokers use different contract sizes, so confirm yours rather than assuming.
How do I calculate position size for gold?
Work in dollars of price movement rather than pips. Divide your money risk by the stop distance in dollars multiplied by the value per $1 move per lot. A $50 risk with a $15 stop on a 100-ounce contract gives 0.03 lots.
Why do brokers define gold pips differently?
Because there is no industry standard. Some use $0.01 as a pip, others $0.10, others a full dollar. A “50 pip stop” can therefore mean a $0.50, $5 or $50 move depending on the broker.
How much margin does gold require?
Typically more than major currency pairs, reflecting higher volatility. At 100:1 leverage a standard lot with gold at 2350 requires roughly $2,350. Margin is collateral, not risk — your actual risk is the stop distance times position size.
Do I pay swap on gold positions?
Usually yes, and gold swap is frequently negative in both directions, meaning you pay to hold regardless of which way you are positioned. Irrelevant intraday, but it accumulates meaningfully over a week or more.
Why is gold called different things on different platforms?
Brokers name it XAUUSD, GOLD, XAUUSD.raw and other variations. This matters when following signals or using automation — confirm you are on the correct symbol, as some brokers offer several gold instruments with different specifications.