Home / Academy / Gold trading for beginners
No experience needed. Learn what XAUUSD is, how gold is priced, what CFDs, leverage, margin and spreads mean, and the main risks, before you ever place a trade.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Educational content only. Nothing here is a recommendation, and no result is guaranteed.
XAU is the standard currency-style code for one troy ounce of gold. (Silver is XAG; the "X" prefix marks a commodity rather than a national currency.) USD is the US dollar. Put together, XAUUSD shows how many US dollars one troy ounce of gold costs.
A troy ounce is about 31.1 grams, slightly heavier than the everyday ounce. When you hear "gold is at 2,700", it means $2,700 per troy ounce. The price changes constantly while markets are open.
Gold is a global asset, but the global market has long quoted it in US dollars. That has two practical effects. First, it is easy to compare gold prices around the world in one currency. Second, the dollar itself becomes a driver of the gold price. When the dollar strengthens, gold priced in dollars often comes under pressure, because it becomes more expensive for buyers holding other currencies. When the dollar weakens, gold can find support. This is a tendency, not a rule: other forces can overpower it. See What moves gold prices?
Brokers show two prices for gold: a bid (where you can sell) and an ask (where you can buy), usually to two decimal places, for example 2699.80 / 2700.00. The gap is the spread. A one-dollar move in the price (from 2700.00 to 2701.00) is a "1-dollar" or "100-point" move depending on your broker's convention, which is why this academy describes movement as plain price distance.
The price you see on a chart is usually the bid price. Charts also have different timeframes: each candle can represent 1 minute, 1 hour, 1 day and so on.
Gold's price reflects the balance of buyers and sellers, and many things nudge that balance:
No single factor works every time, and markets often move on expectations rather than the news itself. We give each factor its own lesson later. The main point for now: gold can move fast, in either direction.
| Physical gold (coins, bars) | Gold CFD (XAUUSD) | |
|---|---|---|
| You own | The metal itself | A contract tracking the price; no metal changes hands |
| Profit from | Price rising (you can only buy then sell) | Price rising or falling (BUY or SELL) |
| Leverage | None | Yes: magnifies profit and loss |
| Costs | Dealer premium, storage, insurance | Spread, possible commission, overnight swap |
| Typical risk | Price falls and storage/security | High risk of losing money rapidly; losses can be larger than expected |
| Holding | Long term | Often short term, but can be longer |
This academy is about gold CFDs, because that is what most retail signal-followers trade. They are complex instruments. If you only want exposure to gold's long-term price, other routes exist, and you should take regulated, personal financial advice.
A contract for difference is an agreement with a broker to exchange the difference between a trade's opening and closing price. You never own the gold. If the price moves your way, the broker pays you the difference; if it moves against you, you pay them.
The key risks are:
In the UK and EU, regulated brokers must show a standardised risk warning, including the percentage of their retail accounts that lose money. That figure is a reminder of how difficult CFD trading is. The Financial Conduct Authority publishes its CFD rules and findings at PS19/18.
Most retail CFD accounts lose money. This academy teaches how the market works and how to manage risk. It cannot make trading risk-free, and it cannot make anyone profitable.
With a BUY you profit as price rises above your entry; with a SELL you profit as it falls below your entry. The loss side is the mirror image.
BUY at 2700, price rises to 2710: +10 points × 0.10 × 100 = +$100. If price instead falls to 2690: −$100.
SELL at 2700, price falls to 2690: +$100. If price rises to 2710: −$100.
Leverage lets you control a position larger than the money you put up. Margin is the deposit your broker holds to keep that position open. If a broker offers 20:1 leverage, a $10,000 position needs roughly $500 of margin.
Leverage is not free money. If the market moves against you, your equity falls faster than the price does, and the broker can close trades automatically when margin gets too low. Regulators limit the leverage offered to retail clients in many countries, and the limits are different for different instruments, so check your own broker's terms.
A lot is the unit of trade size. At most brokers, one standard lot (1.00) of gold is 100 troy ounces, so every $1 move in price equals about $100 profit or loss per lot. A 0.10 lot is about $10 per $1 move, and 0.01 about $1. Always check your broker's contract specification for the exact numbers, as some differ.
Lot size is how you control risk. A small lot with a sensible stop risks a small amount. A big lot with the same stop risks far more. The risk management lesson has a calculator.
Every trade starts slightly negative because you buy at the ask and sell at the bid. If gold's spread is 0.20 on a 0.10-lot trade, that costs about $2 before the price has even moved. Some brokers also charge commission per lot, and positions held past the daily rollover may pay or receive swap. Costs matter most for short-term trades, where a bigger share of each result goes on costs.
Gold CFDs trade nearly 24 hours on weekdays at most brokers, with a short daily break and a weekend close. Activity is not even through the day. It tends to be highest when London and New York overlap, because the biggest traders are active and more orders are in the market.
Quiet periods can mean wider spreads and choppier movement. Very busy periods bring bigger swings. Neither is automatically good or bad: it depends on your plan.
Scheduled events such as US inflation (CPI), jobs reports (non-farm payrolls) and central bank rate decisions can move gold sharply within seconds. Spreads often widen at the same time, so costs and slippage rise. Many beginners avoid trading during the minutes around major releases. Our lesson on what moves gold prices shows how to read an economic calendar.
A trading platform such as MetaTrader 5 shows live prices, draws charts, and lets you open, modify and close trades. It connects to your broker, who executes the orders. The platform itself does not make decisions for you. Our MT5 lesson walks through it.
A demo account uses virtual money with live prices. In MT5, use File → Open an Account, pick a broker and choose the demo option. Treat the demo like real money: use realistic lot sizes, always set a stop loss, and keep a simple journal. Demo results do not guarantee real results, because real trading adds emotion and slightly different execution, but it is the cheapest place to make mistakes.
See the full glossary.
Take the quiz below. You will see an explanation for every answer.
XAUUSD is the market code for gold priced in US dollars. XAU is one troy ounce of gold and USD is the US dollar.
Gold can move quickly and CFDs use leverage, so losses can be fast. Beginners should learn on a demo account, risk very small amounts, and understand they may lose money.
That depends on your broker's minimum deposit and lot sizes. A smaller account must use smaller lots to keep risk sensible, and some stops may not be affordable at the minimum lot.
Yes, through CFDs, where you trade a contract that follows the price. You never receive any gold.
No trading is risk-free. CFD trading carries a high risk of losing money rapidly because of leverage.
The Gold Desk shares XAUUSD signals on Telegram, with entry, stop loss and targets on every call. Signals are educational ideas, not advice, and no result is guaranteed. Not directed at residents of the USA. Join the free Telegram channel.