Gold (XAUUSD) moves a lot, trends well and reacts strongly to news, which makes it attractive for challenges. It also moves fast enough to hit a daily loss limit in minutes if the position is too big. Understanding what drives it and how to size it is the difference between the two outcomes.
What moves gold
- US interest rates and real yields: higher real yields usually weigh on gold, lower ones support it.
- The US dollar: gold is priced in dollars, so a stronger dollar often pushes it down.
- Risk sentiment: in times of fear, gold often attracts safe-haven demand.
- US data: CPI, NFP and Fed decisions cause the largest moves.
Best hours
Gold is active from the London open (07:00–08:00 UTC) and most volatile during the New York session, especially from 12:30 to 16:00 UTC when US data and the US cash open hit the market. The Asian session is usually calmer.
Position size: the most important part
On most platforms, 1 lot of XAUUSD is 100 ounces, so a $1 move in price is worth about $100 per lot. A 10-dollar stop on 1 lot risks around $1,000. On a $100K account with 0.5% risk ($500), the position for a 10-dollar stop is about 0.5 lots. Always check the contract size in the platform's instrument info before trading.
A simple approach
- Mark the previous day's high and low and the Asian range.
- Trade with the 4-hour trend: buy pullbacks in uptrends, sell rallies in downtrends.
- Avoid new trades from 30 minutes before to 30 minutes after US high-impact data.
- Take partial profit at 1.5–2R; gold often retraces sharply after big moves.
Common mistakes on gold
- Using the same lot size as on EURUSD.
- Holding a position into CPI or NFP.
- Stops too tight for gold's normal noise (a few dollars intraday).