Gold and metals terms

Dollar index

Also called: DXY, US dollar index.

The dollar index measures the US dollar against a basket of major currencies, and it moves inversely to gold often enough to be treated as a companion chart.

Because gold is priced in dollars, a stronger dollar mechanically makes gold more expensive in other currencies and tends to reduce demand. The inverse correlation is one of the more stable relationships in macro trading, though it is a tendency rather than a rule and breaks down regularly.

The most useful application is a sanity check rather than a signal. A gold rally accompanied by a falling dollar is coherent; a gold rally with the dollar also rising is being driven by something else — usually risk aversion — and behaves differently.

It is also a correlation risk worth naming. A long gold position and a short dollar position are substantially the same trade, and running both while believing you are diversified is a common way real exposure ends up double what was intended.

How closely gold has tracked the dollar index, year by year, is measured in gold vs the dollar.

Gold futures

Also called: GC, MGC, COMEX gold, Micro gold futures, Gold futures exchange, XAUUSD futures, Gold futures contract.

Gold futures are exchange-traded contracts to buy or sell gold at a set price on a future date. In the US they trade on COMEX, part of CME Group: the standard contract (ticker GC) is 100 troy ounces and the Micro contract (MGC) is 10.

Read the full entry: Gold futures →

Gold volatility

Gold volatility describes how far XAUUSD typically moves in a given period, and it is high enough that gold requires different risk settings from major FX pairs.

We measured a median daily range of $76 over a year of gold bars — about 1.8% of price, or $7,600 per standard lot. The tenth percentile was $26 and the ninetieth was $163, so the gap between a quiet day and a violent one is more than sixfold. Position sizing carried over from FX consistently over-sizes gold for exactly this reason.

Volatility is also strongly session-dependent. The Asian session is typically quiet, London brings the first expansion, and the US session — particularly around economic releases — produces the largest moves. A strategy tested across all hours is being measured on several different markets averaged together.

The practical response is to scale stops to ATR rather than fixing them in dollars, and to restrict trading to the sessions the strategy was actually built for. Ours trades a defined window rather than around the clock for exactly this reason — see gold trading hours.

When in the day gold tends to make its high and low is measured in gold makes its daily low in the Asian session.

Real yields

Real yields are nominal bond yields minus expected inflation, and they are the single most reliable macro driver of the gold price over medium horizons.

Gold pays no interest, so its opportunity cost is whatever a safe interest-bearing asset yields after inflation. When real yields rise, holding gold becomes more expensive in that sense and the price tends to fall; when they fall or turn negative, the reverse.

The relationship is usually measured against inflation-protected government bond yields, and it is strong enough over months and years to be the default macro explanation for large gold moves. It is much weaker intraday, where positioning and flow dominate.

For a bot trading M1 to M15 bars this is context rather than signal. It explains why a persistent directional bias exists in a given period without being tradable on its own — which is a useful distinction, because a system built on a genuine macro relationship at the wrong timeframe will underperform a much simpler one that respects the timeframe it actually operates on.

How closely gold has actually moved with real yields since 2003, and how far it broke away from them after 2021, is measured in why is gold going up?

Safe haven asset

A safe haven is an asset investors buy during market stress on the expectation it will hold value while riskier assets fall, and gold is the archetype.

The safe-haven bid is why gold can rally on news that is bad for almost everything else. Geopolitical escalation, banking stress and sharp equity declines all tend to produce gold buying, and the reaction is often immediate and large.

The relationship is real but far from reliable. Gold has fallen during several major risk-off events, usually when investors sold it to raise cash or meet margin calls elsewhere. In the initial phase of a liquidity crisis, everything is sold including the safe haven.

For an intraday system this is mostly a warning about event risk rather than a tradable thesis. Safe-haven flows arrive as sudden repricing rather than as trends you can join, which is why our engine runs a news shield against the high-impact calendar instead of attempting to trade the reaction.

Whether gold actually rose when stocks fell is measured in gold vs the S&P 500, and whether it kept up with rising prices in is gold a good hedge against inflation?

Troy ounce

A troy ounce is the standard unit for precious metals, equal to about 31.10 grams — roughly 10% heavier than the ordinary avoirdupois ounce.

All gold pricing is per troy ounce, so the XAUUSD quote is the dollar cost of 31.10 grams. The distinction from a normal ounce is not trivia: confusing the two produces a 10% error in any conversion between the quoted price and a physical weight.

The standard contract of 100 troy ounces is what makes gold arithmetic convenient in a trading account. One standard lot is 100 ounces, so a $1.00 move in the quote is $100, and at the 0.01 minimum a $1.00 move is exactly $1.00.

That one-to-one correspondence at the minimum lot is genuinely useful when reasoning about risk. It means a stop expressed in dollars of gold price is immediately a stop in dollars of account, per micro lot — no conversion, no pip convention to resolve. See the pip value calculator for the full picture.

What every common gold bar size weighs in troy ounces, grams and pounds, and what each is worth, is in how much is a gold bar worth?; why a kitchen-scale pound of silverware holds 14.58 troy ounces is in how much is sterling silver worth?; how many ounces of silver one troy ounce of gold has bought since 1971 is in the gold-silver ratio, tested.

XAUUSD

Also called: Spot gold, Gold/US dollar, What is XAUUSD.

XAUUSD is the ticker for spot gold priced in US dollars, quoting the cost of one troy ounce and traded as a leveraged CFD by most retail brokers.

XAU is the ISO code for gold, following the convention that precious metals take an X prefix. The pair is quoted like a currency pair — a rising number means gold strengthening against the dollar — and it trades nearly around the clock on the same schedule as FX.

What retail traders access is almost always a contract for difference on spot gold rather than the metal or a futures contract. The price tracks the underlying closely but the instrument is a bilateral agreement with your broker, which is why specifications differ between brokers on the same symbol.

Broker symbol names vary and this matters for automation. Exness uses XAUUSDm for its cent and standard accounts, others use XAUUSD.raw, XAUUSD.pro or a plain XAUUSD, and an EA hard-coded to one name silently fails on another. See symbol suffix and our XAUUSD EA page.

The headline numbers on how XAUUSD moves, each with its sample size, are collected in gold trading statistics.

XAUUSD spread

The XAUUSD spread is the bid-ask difference on spot gold, typically far wider than on major FX pairs and highly variable by broker, account type and session.

Raw and ECN gold accounts commonly quote in the $0.10 to $0.40 range with a separate commission, while standard accounts fold a wider spread in and charge nothing extra. Comparing the headline spread alone across those two account types is meaningless.

It widens predictably at the daily rollover, at session transitions and around high-impact releases, sometimes by several multiples. A strategy that ignores spread will therefore concentrate its worst entries at precisely these moments, because those are also the moments that generate the most signals.

Our engine refuses to open a gold position when the spread exceeds $1.00. On our own broker that threshold is rarely reached — 3 bars in 70,546 — so treat it as insurance against a rare event rather than a filter doing daily work — see spread and the spread cost calculator.