Gold margin calculator

Margin is reserved, not spent

Margin is collateral the broker sets aside while a leveraged position is open, and it is returned when the position closes. It is not a cost and it is not a loss — which is why traders routinely underestimate how constrained an account is while several positions are open.

The formula is notional value divided by leverage. A standard lot of gold at $2,400 is $240,000 of notional exposure, so at 1:500 leverage it requires roughly $480 of margin. That ratio is what makes small accounts able to trade gold at all, and it is also what makes them able to lose everything quickly.

The number that actually binds is free margin

Free margin is equity minus margin already used, and it falls both when you open positions and when open positions move against you. A trader watching a healthy balance figure while free margin approaches zero is one adverse move from being unable to trade and two from liquidation.

For an automated system this typically shows up partway through a session rather than at startup: the first trades open normally, each consuming margin, and then an order is refused with a "not enough money" result. See not enough money.

Leverage on metals is often lower than the headline

Many brokers apply reduced leverage to gold relative to FX, reduce it further above certain position sizes, and reduce it again around weekends and major events. The figure in your account profile is not necessarily the figure applied to XAUUSD — read the symbol specification in Market Watch.

Note also that leverage does not change risk on its own. Risk is determined by position size and stop distance; leverage only determines whether the broker permits the position. What high leverage removes is the natural brake that would otherwise prevent an oversized position from being opened at all — see leverage.