Gold (XAU/USD)

XAUUSD is gold quoted in US dollars, and the result of a trade in it is the price movement measured in pips multiplied by the pip value, converted into your account currency. Everything below is about those two numbers and where they come from.

What the contract actually represents

XAUUSD is a metal instrument quoted in USD. One lot is 100 units of the base asset — in this case 100 troy ounces of gold. That contract size is the bridge between the price on the screen and the money in your account, and it is the figure every other calculation rests on.

Note the relationship between the last two rows: the pip and the last decimal place are the same size. Gold is quoted to two decimals, and one pip is one unit of that second decimal. There is no separate, smaller unit to track — the smallest quoted change and the pip are one and the same thing.

If a point above raised a question, Position size · Gold (XAU/USD) and Value per pip · Gold (XAU/USD) may answer it.

Why the pip is 0.01 and not 0.0001

Currency pairs are conventionally quoted to four decimals or more, which is why traders coming from FX assume a pip is a fraction of a cent. XAUUSD does not work that way. The registry lists the price increment as 0.01 with two decimals of precision.

This matters for reading a chart. A move from one price to another that looks like a handful of "points" on a gold chart is a much larger number of pips than the same visual gap would represent on a major currency pair. The unit is bigger, so the count is smaller. If you carry over intuition from EURUSD, you will misjudge the size of a move — and therefore the size of the result — by a wide margin.

How the result of a trade is counted

The registry states the calculation directly: the price movement in pips is multiplied by the pip value, which equals 0.01 × 100 in the quote currency (USD) per lot, and the result is then converted into the account currency.

Read that formula as three separate operations, because each one can change the answer:

1. Movement in pips. The distance the price travelled, expressed in units of 0.01. Direction determines sign: a long position gains on the way up, a short position gains on the way down.
2. Pip value per lot. Defined as 0.01 × 100 in USD per lot. The 100 is the contract size in troy ounces; the 0.01 is the pip. Both come from the instrument specification, not from the market at the moment of the trade.
3. Conversion to account currency. The pip value is denominated in USD because gold is quoted in USD. If the account is held in another currency, the result has to be translated into that currency before it means anything to the balance.

The order of operations is fixed. You cannot skip the conversion step and compare the raw USD figure against a balance held in rands, and you cannot apply the pip value before you know the size of the position in lots.

The three inputs that change the outcome

Only three quantities enter the calculation, and each one scales the result independently:

Position size is the only one of the three you set yourself before the trade. The movement is unknown until the position is closed. The pip value is a property of the instrument and does not vary from one trade to the next.

That asymmetry is the practical point. Because the pip value is fixed and the movement is not, the size you choose determines how much a given price move costs or pays — and it does so in a straight line, with no thresholds or tiers.

Where the number on the statement comes from

When a position is closed, the platform has the entry price, the exit price, the contract size and the pip definition. The difference between the two prices, expressed in pips, is multiplied by 0.01 × 100 USD per lot, scaled by the number of lots, and converted into the account currency. That final figure is what appears as profit or loss.

Two consequences follow from the specification itself. First, because the pip value is defined per lot in USD, the same price movement produces a different money result for different position sizes — the calculation is linear in lots, not fixed. Second, because the pip is 0.01 and the quote has two decimals, every quoted price change is a whole number of pips; there is no residual fraction left outside the count.

If you want the figure for your own trade, put the entry price, exit price, position size and account currency into the calculator. It applies the same formula the registry describes and returns the amount in your account currency, so the number is checkable rather than estimated.