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Gold (XAU/USD) trading basics for beginners

XAU/USD is the price of one troy ounce of gold in US dollars. It is one of the most popular markets for retail traders in South Asia — and also one of the fastest-moving, so position size matters even more than on currency pairs.

By the TradeFather education team · Updated 27 Oct 2026 · Educational content, not financial advice

Key takeaways

1 standard lot of gold is usually 100 troy ounces (check your broker's contract specs).
A $1 move in gold = about $100 per standard lot, $1 per 0.01 lot.
Gold often moves several dollars per hour — far more than EUR/USD in pip terms.
US data, interest-rate expectations and the US dollar drive gold the most.

Contract maths

Lots and price moves on gold

Brokers define a 'pip' on gold differently (often $0.10 or $0.01), so think in dollars of price movement instead. Example: buying 0.05 lots and gold rising $8 = about $40 profit before costs; falling $8 = about $40 loss.

Lot size	Ounces (typical)	Value of a $1 move
1.00	100 oz	$100
0.10	10 oz	$10
0.01	1 oz	$1

What moves gold

The main drivers

US dollar

Gold is priced in dollars, so a stronger dollar often weighs on gold and a weaker dollar supports it.

Interest rates

Gold pays no interest. Rising real rates make it less attractive; falling rates help it.

Inflation & fear

Gold is seen as a store of value during inflation worries and geopolitical stress.

US data

CPI, jobs reports and Fed decisions often cause gold's biggest daily moves.

Interest rates and currencies Inflation (CPI) and forex

Timing

Best times to trade gold in IST and PKT

Gold is most active during the London session and especially the London–New York overlap, roughly 5:30–9:30 PM IST / 5:00–9:00 PM PKT while the UK and US are on daylight saving, and about an hour later in winter. Asian hours are usually quieter.

Best time to trade forex in IST & PKT

Risk

Risk rules for gold

1
Start with 0.01 lots
Gold's volatility makes small sizes essential while learning.
2
Use wider stops, smaller size
A normal gold stop may be $5–$15; size down to keep dollar risk fixed.
3
Respect news
Avoid opening trades minutes before major US data.
4
Check local rules
RBI does not permit Indian residents to fund overseas leveraged forex/CFD platforms, and SBP treats offshore forex/CFD platforms as illegal for Pakistani residents. Exchange-traded gold products are separate — check your regulator.

Is forex legal in India? Drawdown and recovery

Before you trade

Risk notice

Forex and CFD trading is high risk. Leverage magnifies losses as well as gains, and regulated brokers' own disclosures typically show that most retail CFD accounts lose money. Never trade money you cannot afford to lose. TradeFather is an independent education and tools provider — not a broker or financial adviser — and does not provide forex signals or execute trades.

If you live in India or Pakistan: RBI does not permit residents to fund overseas online forex/CFD platforms, and SBP has declared offshore forex, margin and CFD platforms illegal for residents. This guide explains how markets work; it is not a recommendation to open such an account.

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