Pip Value & Contract Specifications
Gold (XAU/USD) has a contract size of 100 troy ounces per standard lot. One pip = $0.01 (one cent of gold price movement). This gives a fixed pip value of $1.00 per standard lot, regardless of the current gold price — unlike forex pairs where pip value shifts with the exchange rate. In ZAR terms the value changes daily with the USD/ZAR rate.
| Lot Size | Contract (oz) | Pip value (USD) | Pip value (ZAR @ 18.50) | 500-pip stop loss |
|---|---|---|---|---|
| 0.01 (micro) | 1 | $0.01 | R0.185 | ~R92.50 |
| 0.10 (mini) | 10 | $0.10 | R1.85 | ~R925 |
| 0.50 | 50 | $0.50 | R9.25 | ~R4,625 |
| 1.00 (standard) | 100 | $1.00 | R18.50 | ~R9,250 |
ZAR values illustrative at USD/ZAR 18.50. Use the calculator above for live rates.
| Instrument class | Spot gold |
|---|---|
| One pip | 0.01 |
| Standard lot | 100 troy ounces |
| Value of one pip per lot | $1.00 |
| Typical spread | 30 pips — · FxPro verified |
| Notional value of one lot | — |
| Margin on one lot at 1:30 / 1:100 / 1:500 | — |
The last two rows move with the market and are filled in from the live rate; everything above them is fixed by the contract. Leverage available to you depends on your regulator and account type — check it in the platform before you size a position.
Position Sizing Example
Suppose you have a R50,000 account and risk 1% per trade (R500). You place a 500-pip stop loss on XAU/USD (a normal intra-day buffer given gold's volatility).
At USD/ZAR 18.50, each pip per lot = R18.50. The formula:
Lots = Risk ÷ (Stop pips × Pip value in ZAR)
Lots = R500 ÷ (500 × R18.50) = R500 ÷ R9,250 ≈ 0.054 lots
Round down to 0.05 lots (5 micro-lots). This keeps your risk within budget even if gold gaps through your stop on a major news event.
| Currency | Central bank | Policy rate | What moves it |
|---|---|---|---|
| XAU | No issuer | Priced in USD | real US yields · FOMC · fund flows |
| USD | Federal Reserve (Fed) | Federal funds target range | FOMC · CPI · jobs data |
About XAU/USD — Key Drivers & Trading Hours
Gold is one of the most volatile instruments available to retail traders. A typical daily range is 500–1,000 pips (using the $0.01 pip convention), and on high-impact days (Fed decisions, geopolitical shocks) moves can exceed 3,000 pips. South African traders have a natural affinity for gold — South Africa is historically one of the world's largest gold producers, and the ZAR maintains a well-documented negative correlation with gold prices.
The key drivers of XAU/USD price are: US Dollar strength (inverse relationship), real interest rates and Fed policy expectations, safe-haven demand during geopolitical crises, and central bank gold reserve purchases. The COMEX gold futures market sets the global price benchmark.
Best trading hours for XAU/USD in SAST: London–New York overlap 14:00–18:00 SAST offers the tightest spreads and highest liquidity. The COMEX open around 16:30 SAST is frequently the most volatile 30-minute window of the day. Avoid market orders before 09:00 SAST when spreads can widen to 30+ pips.
Warning: Gold's 500–1,000 pip daily ATR means even a modest 0.10 lot position can swing R925–R1,850 in a single session. Start with micro lots (0.01–0.03) until you have a calibrated sense of how gold moves on your chosen time frame.
Spreads are tightest when two sessions are open at once and widest when one desk has gone home and the next has not arrived. The shaded band is the overlap.
Pip values sourced from ECB reference data (Frankfurter API). All values are indicative and for educational purposes — not live trading quotes. See full pip value table →
