What is XAU/USD and what are you trading?
XAU/USD represents the US-dollar price of gold, commonly expressed per troy ounce. Many retail brokers offer it as a derivative such as a contract for difference (CFD), not as physical delivery of bullion. You obtain price exposure under the broker’s contract terms, and leverage can magnify both gains and losses.
That distinction matters for costs. A spot-based CFD may have overnight funding or swap charges, while exchange-traded futures have different specifications and financing embedded in their pricing structure. Do not substitute a futures contract description for your broker’s XAU/USD CFD schedule.
Find the contract size before calculating anything
Some brokers define one full gold CFD lot as 100 troy ounces. Others use different contract definitions, and a cent or specialised account can differ again. Verify the contract size in the symbol specifications for your exact account and platform; the following examples explicitly assume 1 lot = 100 ounces.
| Position | Ounces under the example contract | Value of a $1 gold-price move |
|---|---|---|
| 1.00 lot | 100 oz | $100 |
| 0.10 lot | 10 oz | $10 |
| 0.01 lot | 1 oz | $1 |
These dollar movements describe the gross price sensitivity of the illustrative position, not the amount you must deposit as margin. Margin is collateral, not a trading fee, and your maximum risk cannot be inferred from the margin requirement alone.
Calculating the gold spread in dollars
The most dependable approach is to use the price difference between ask and bid. Suppose a hypothetical gold CFD quotes bid 2,700.20 and ask 2,700.50. The spread is $0.30 per ounce. At the assumed 100-ounce contract size, that represents about $30 for one lot; at 0.1 lot, the same quoted spread represents about $3.
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0.10 lot under a hypothetical 100-ounce-per-lot contract. Market price and spreads are examples only.
Be cautious with “pips” and “points” on gold: platforms and broker documents do not consistently use the same labels. Compare the explicit bid–ask price difference or a verified spread in currency terms when possible.
Where commissions enter the calculation
A standard account might have no separately itemised commission, while a raw account might charge one. If an illustrative account charges $7 round turn per one lot, then 0.1 lot adds $0.70 to the $3 spread cost above, producing an estimated $3.70 before slippage and overnight charges.
This arithmetic works only when commission scales linearly with lots and applies to gold under the same rate. Check minimum tickets, account-specific metal fees, and whether commission is listed per side or for the complete trade. For the convention itself, consult our guide to forex trading costs.
Overnight financing is a separate decision
Gold CFD positions kept beyond a broker’s rollover time may incur daily financing or swap. Rates can differ for long and short positions, change over time and include special multiple-day adjustments. An overnight holding-period estimate can therefore diverge materially from the cost of a position opened and closed in a single session.
The UK Financial Conduct Authority has documented substantial differences and disclosure shortcomings in CFD overnight funding charges. Read the FCA’s pricing review and confirm the current gold specification on the provider’s own platform.
Example: comparing two gold accounts
Assume both hypothetical accounts trade exactly the same 0.10 lot, meaning 10 ounces under our example contract. Account A has a $0.30 per-ounce spread and $0.70 total commission at this size. Account B has a $0.42 per-ounce spread and no commission. Account A’s estimated round-trip transaction friction is $3.70; Account B’s is $4.20. Neither figure includes financing, slippage, or currency conversion.
| Illustrative input | Account A | Account B |
|---|---|---|
| Price spread / oz | $0.30 | $0.42 |
| Spread cost / 10 oz | $3.00 | $4.20 |
| Round-turn commission | $0.70 | $0.00 |
| Estimated transaction cost | $3.70 | $4.20 |
To test supported broker scenarios, open the True Trading Cost Calculator, select XAU/USD, and verify the pricing basis and contract assumptions shown for each broker. The broker-cost comparison hub is a starting point for related research, not a substitute for updated live quotes.
Checklist before placing an XAU/USD trade
- Read the contract size and minimum lot for your gold symbol.
- Translate the actual bid–ask difference into dollars per ounce.
- Add opening and closing commission for that specific instrument.
- Check long/short swap rates, rollover time and account currency.
- Consider spread widening, execution quality and leverage risk separately.
Frequently Asked Questions
Is one gold lot always 100 ounces?
No. It is common in some CFD contract setups but not universal. Use the broker’s instrument specifications rather than assuming a fixed figure.
How do I convert a gold spread into US dollars?
Multiply the bid–ask price difference in USD per ounce by the number of ounces represented by your trade. Include any separate commission afterwards.
Is holding gold overnight free?
Not necessarily. Funding or swap terms depend on the broker, account, position direction, instrument and rollover schedule, and may be updated.
Editorial note: Prices, contract sizes and fees below are teaching examples, not current broker quotes or a live account test. Trading forex or CFDs with leverage carries substantial risk. Confirm current terms for your instrument, account and jurisdiction.