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Gold is one of the most common and rewarding metals you can trade. With the right trading strategy and spread-betting platform, trading gold more or less resembles Forex trading.
Gold trading strategies are diverse and primarily encompass fundamental, sentimental, and technical analysis. In addition, gold is usually priced in US dollars, which helps in market analysis. Therefore, we will examine why you should trade gold and some strategies to exhaust for maximum returns.
One of the biggest problems for new traders is calculating gold and calculating pip value for gold.
Pips in gold
Pips in gold assets represent a price movement of 0.01 for most MT4 and MT5 brokers, while for currency pairs, a pip price movement is 0.0001. For example, when gold prices move from 1851.70 to 1851.71, it is 1 pip movement.
Below is presented 22 pips difference between the bid and ask price for gold assets.
How to calculate gold pips?
To calculate gold pips, you must know that 1 pip gain represents a 0.01 move in the gold asset. So, for example, when the gold price changed from 1851.70 to 1851.71. it is 1 pip move. However, if the price moves from 1851.00 to 1852.00, it is 100 pips move.
Calculating pips for gold is a process we need to calculate in the first step the number of pips. For example, for gold or XAUUSD, 1 pip has a value of 0000.01 for 5-digit brokers, but it is different for 4-digit brokers. How to read pips on gold, then?
How to Read Pips on Gold on the MetaTrader Platform?
If we trade gold on the Metatrader platform, 1 micro lot trading size for 100 pips is $1. If we buy 1 micro lot from 1693.00 to 1694.00, it is $1 or 100 pips. If we buy 1 mini lot from 1693.00 to 1694.00, it is $10 or 100 pips. Finally, if we buy 1 lot from 1693.00 to 1694.00, it is $100 or 100 pips.
XAUUSD pip count Table:
|XAUUSD pip count||Pip value per 1 standard lots||Pip value per 1 mini lot|
|XAUUSD||1 USD||0.10 USD|
|XAUEUR||1 EUR||0.10 EUR|
When we trade the gold, instead of calculating the number of pips and XAUUSD pip count, we ask how many cents (dollars) XAUUSD or gold is going up or down. In Metatrader, traders calculate gold pips based on dollars and lots.
Watch the video on how to calculate pips for XAUUSD below:
Calculating the dollar for gold trading is easy when changing the number of pips and lots.
One of the best tools for Gold Pips analysis and prediction calculation is TrendSpider Machine Learning’s automated technical analysis software.
Above is presented how Trendspider detects Gold price trends.
How to calculate gold pips when gold is traded in ounces?
Gold can be traded in ounces on some trading platforms instead of lots. For example, if you buy 20 ounces of gold at an entry price of $1400 and take a profit value of $1401.33, you can earn 20 ounces* 133 pips = 2660 pips because from $1400 to $1401.33 are 133 pips.
To convert ounces into trading lots and dollars, remember:
- 1 ounce of gold (XAUUSD) is 1000 units or 1 micro lot with a pip value of $0.01.
- 10 ounces of gold are 10,000 units or 1 mini lot with a pip value of $0.1.
- 100 ounces of gold are 100,000 units or 1 standard lot with a pip value of $1.
If we trade gold on different platforms than Metatrader, where trading is not in lots than in ounces (oz), then we have:
- For Gold: Position Value in GBP / Price of Gold / 100 oz = Volume or contract size in lots
- For Silver: Position Value in GBP / Price of Silver / 5000 oz. = volume or contract size in lots
Gold: Using the given formula: Position Value in GBP / Price of Gold / 100 oz = Volume or contract size in lots
Given: Position Value = £50000 Price of Gold = £1293.40 per oz
Plugging in these values: = £50000 / £1293.40 / 100 oz = 38.64 (rounded to two decimal places)
Therefore, the contract size for Gold = 0.39 lots (rounded to two decimal places)
Silver: Using the formula: Position Value in GBP / Price of Silver / 5000 oz. = volume or contract size in lots
Given: Position Value = £50000 Price of Silver = £19.5340 per oz
Plugging in these values: = £50000 / £19.5340 / 5000 oz = 0.5113 (rounded to four decimal places)
Therefore, the contract size for Silver = 0.51 lots (rounded to two decimal places).
So, based on the given data and formulas:
- For Gold: A £50000 position for £1293.40 per oz would equal 0.39 lots.
- For Silver: A £50000 position for £19.5340 per oz would equal 0.51 lots.
Similarly, crude oil pips can be calculated as described in our article.
Gold (XAUSUD) pip calculator
The gold pip calculator is presented below. Please add the size and the number of gold pips to see the worth in dollars:
How to count pips on gold?
The best way to count pips on gold on Metatrader is to remember that $1 is 1 micro lot for 100 pips. So, in the same logic, 1 mini lot trading size for 100 pips is $10, and 1 lot trading size for 100 pips is $100. So, for example, 1 lot gold forex trading size for 1 pip is worth $0.1.
Let us give one example:
How to count 50 pips in gold?
To count 50 pips in gold, remember that 1 micro lot for 50 pips target is $0.5. Thus, 1 mini lot for 50 pips target is $5, and 1 lot for 50 pips target is $10. Most forex MT4 brokers have this calculation. However, some brokers calculate gold pip in different ways.
How to calculate pips for XAUUSD?
To calculate XAUUSD (gold) pips, you need to know that 1 pip gain represents a 0.01 move in XAUSUD (gold). So, for example, when XAUSUD price changes from 1834.00 to 1834.01. it is 1 pip move. However, if the price moves from 1834.00 to 1835.00, it is 100 pips move.
How to calculate 1 lot XAUUSD?
1 lot XAUSUD, you can count as $0.1 for one pip move. So, for example, if you buy 1 lot XAUSUD, and the price goes from 1800.99 to 1801.99 (100 pips gain), you will make $100.
How to calculate lot size for gold?
If you calculate 1 lot size of gold in Metatrader, it has 100,000 units, and 1 pip of movement is worth $1. For example, when the gold price goes from 1800.00 to 1800.01, this 1 pip move for 1 lot is worth $1. If the price goes from 1800.00 to 1801.00, this 100 pips move for 1 lot of gold worth $100.
What is XAUSUD leverage?
The XAUSUD leverage is the minimum margin requirement for the trader, so if your leverage is 1:100, you can borrow 100 dollars for every dollar you have in your Gold trading account. So, for example, if your leverage is 1:100 and you have $1000, you can control your $ 100,000 investment.
Why trade gold?
Times have changed, and so has the gold trade. Before, traders had to buy and resell the metal, which proved challenging. Futures and options were introduced, where traders traded without ending up with a complete set of valuables. As time progressed, Gold exchange-traded funds came, making trading more comfortable. Gold traders traded gold the same way stocks were sold in the forex market. By far, we have the best approach to the gold trade. Nowadays, the gold trade and forex trade are more or so similar.
Spread-betting platforms have made gold trading one of the most straightforward ventures. Like currency trade, all you have to do is buy or sell, depending on the price predictions. One of the gold trade advantages is that, unlike the currency, you are dealing with a physical commodity. Another reason you should trade gold is that it is mainly used as a store of value. Finally, unlike the currency, it is not subject to many government regulations.
Gold trading strategies
There are several strategies you can employ when trading gold. Some of the most common include studying the market forces, positioning of gold traders, technical analysis, which is quite demanding, and using a gold chart in the research. However, the best strategy combines technical analysis, fundamental analysis, sentiment analysis, and the gold chart.
The sentimental analysis allows traders to spot trends, whereas the gold table determines when to enter and exit a trade.
Gold Trading Insurance -Market-Leading Insurance
When you trade gold, it is essential to trade using regulated forex brokers like HF Markets, which has made efforts to safeguard its liabilities against Clients and other third parties with a Civil Liability insurance program for a limit of €5,000,000, which includes market-leading coverage against risks such as errors, fraud, omissions, negligence.
Trading Gold in Different Ways
As we have mentioned earlier, you can always trade gold physically. But, if you plan to do it electronically, there are different ways. You can trade gold ETFs or Exchange-Traded Funds, gold CFDs, futures contracts, and more. If you are doing electronic trading, you must find a good trading platform to enter a trade and profit. If you plan to do it in a significant volume or are new to it, it is advisable to work alongside a broker.
When we trade gold, it is crucial to know to calculate pips for gold and calculate profit in dollars because it is not the same as when trading forex. You should, however, make some considerations before buying and selling gold. Me sure, therefore, that you use both fundamental, sentimental, and technical analysis techniques.