Gold Metal Online Trading - XAUUSD Trading Symbol
Gold metal is popularly traded in the online financial markets. Because Gold is one of the precious metals its price is determined and quoted in terms of US Dollars at any one given time. Anyone can then buy or sell gold either physically in the form of gold bars or using the more popular method - selling and buying gold online in the form of contracts.
When it comes to buying and selling Gold metal online - a trader has to look for an online Gold Broker, the gold broker will then provide access to trading gold online. The gold that will be traded will be traded as a contract; once a trader buys a contract for Gold, the trader will then make a profit or loss depending on the direction that the price of Gold will move in. If a trader buys a contract of Gold and the prices of Gold move up then the trader will have made a profit from the price difference and they can close their buy trade of the Gold contract and book their profits. However, if a trader buys one contract of Gold and the price then moves down then the trader will make a loss once they close their open contract at a lower price.
Gold contracts online are traded the same way as shares, investors will make money when the value of their shares or stocks moves up and make a loss if the price of their share or stocks moves down.
When it comes to online Gold metal trading, gold is traded as a contract; one contract of Gold is made up of 100 ounces. Therefore when a trader is trading gold online then they will be buying or selling a contract that is equal to 100 ounces of Gold.
The prices of Gold will be quoted by the online Gold trading broker and a trader can buy or sell gold contracts at the current quoted price.
In online trading Gold is traded represented by the trading format - XAU
Because Gold is quoted against the US Dollar, the trading symbol will be XAUUSD; meaning the price of gold quoted against the US Dollar.
Price of Gold - Gold Price Quotes
The Price of Gold is quoted as show above using the Bid and Ask Price
- Bid is the price at which you buy
- Sell is the price at which you sell
The trading symbol of Gold is XAUUSD, but in the above example it is just written as Gold.
The current price quote of Gold is 1267.11
This means that a trader wanting to buy one contract of Gold would buy at the price of 1267.11
Gold is quoted using two decimal digits in the case above the last two decimal digits are .11
The last decimal point is used to calculate the profit and losses of trades, the last point is known as a 1 pip or one point.
When trading Gold one pip represents a movement of $1
If the price were to move up from 1267.00 to 1268.00 this would represent a price move of one dollar, but because gold is traded in contracts of 100 ounces, this $1 dollar move would be multiplied by 100, the contract size, therefore a move from 1267.00 to 1268.00 would give the trader a profit of $100.
Because a move from 1267.00 to 1268.00 represents 100 decimal points moves, this means each decimal point digit represents a profit equivalent to $1 per 1 pip (0.01 price move).
Opening a Gold Chart
To open a Gold trading chart, a trader can open this chart from the gold trading platform, MetaTrader 4 platform from the "File" menu as shown below. Then select "New Chart" option.
Opening Gold Trading Chart on MetaTrader 4 Platform
A trader can then choose Gold Metal or XAUUSD Metal, from the "Spot Metals" option shown below after clicking the New Chart option.
Opening XAUUSD Trading Chart on MetaTrader 4 Gold Platform