An ounce of gold, in dollars told:the pair that prices the oldest hold.
The trading symbol for gold priced in US dollars.
Gold is widely traded in the forex market as a safe-haven asset and is often inversely correlated with the US dollar.
In plain words
XAU/USD is the market symbol for gold priced in US dollars. XAU is the standard code for one troy ounce of gold, so the quote is the number of dollars one ounce costs, written like a currency pair with gold as the base and the dollar as the quote.
See it move
XAU rises against USD: the pair’s price goes up
Why it matters
Gold is traded alongside currencies on many platforms, but its contract differs: one lot is commonly 100 troy ounces, and its price moves in dollars and cents and not in the four-decimal pips of most currency pairs. Its price is often discussed together with the US dollar and with real yields.
Worked example
An example only. The figures are round and invented for the arithmetic: they are not market prices.
A trader holds one lot of XAU/USD, taken here as 100 troy ounces, bought at an invented price of 2,000.00, and the price moves to 2,010.00.
- 1Change per ounce2,010 − 2,000 = 10 US dollars.
- 2Change on the lot100 × 10 = 1,000 US dollars.
- 3Notional value at entry100 × 2,000 = 200,000 US dollars.
A move of 10 US dollars in the price, which is 0.5% of 2,000, changes the value of the position by 1,000 US dollars.
A common mistake
Gold is often called a safe haven and is said to move opposite to the dollar. Both are tendencies seen in past data, not fixed relationships: gold and the dollar have at times gone up together, and gold can drop sharply.
Check yourself
Educational information, not investment advice or a recommendation to trade.