Gold Trading Guide: What Moves Gold Prices?

Gold trading guide: what actually moves XAUUSD — real yields, the dollar, central bank buying — and what only looks like it does, how gold CFDs are sized and priced, when it trades, and where the risks sit.

Gold is formally a commodity and behaves like a currency. It has no yield, no earnings and no industrial demand large enough to set its price; what it has is a five-thousand-year record as the thing people hold instead of money. Its price is therefore set less by mining and jewellery than by the return available on the alternative — cash and bonds, after inflation — and by the dollar it is priced in.

Key Takeaways

• Real yields are the strongest driver. Gold pays nothing; when the after-inflation return on cash rises, gold's opportunity cost rises.
• The US dollar is the second. Gold is priced in it and is its alternative; the two are usually inverse.
• Central bank purchases have been a large, price-insensitive source of demand in recent years.
• Safe-haven demand is real in acute crises and unreliable in slow ones.
• Gold is a monetary asset for calendar purposes: US inflation, US employment and the Fed move it, not gold-specific data.

What Moves Gold, in Order

Real yields deserve the emphasis. A holder of gold gives up the interest on cash; if that interest is 4% and inflation is 2%, holding gold costs 2% a year in real terms. If inflation rises to 4.5%, holding cash costs 0.5% a year and gold's relative appeal improves. Over most periods, the chart of gold and the chart of inverted real yields are near-mirrors. See the relationship between gold, real yields and the US dollar.

How Gold CFDs Work

XAUUSD is quoted in US dollars per troy ounce, to two decimals. For illustration, a contract size of 100 ounces per lot at $2,500 is $250,000 of exposure; a $1 move is $100 per lot. MarketsAll's contract size, point value and margin are in the contract specification; account leverage runs up to 1:200 and the figure applied to gold is set there.

MarketsAll quotes XAUUSD spreads from 8 on Premium accounts to 35 on Standard, as listed on the account types page.

Trading Hours

Gold CFDs trade close to 23 hours on weekdays with a short daily break, priced off COMEX futures. Liquidity is deepest during London and New York hours and thinnest in the Asian session and around the daily break. All trading stops for the weekend. See global market trading hours.

Volatility and Liquidity

Gold typically moves 0.5–1.2% a day — steadier than oil or single shares, more than a major currency pair. Around US inflation prints, employment data and Fed decisions it moves far more, and spreads widen. The calendar for gold is the US calendar: see how to use an economic calendar.

Worked Example: A Fed Decision

Long 0.10 lot XAUUSD at $2,500 (illustrative 10 oz, $25,000 exposure). The Fed holds rates but signals fewer cuts than the market expected.

A 1.6% move, a $400 loss on $25,000 of exposure, from a statement about the pace of cuts. Nothing about gold changed. See position sizing for sizing the stop to that kind of event.

(Illustrative. Excludes spread and financing.)

What Only Looks Like It Moves Gold

• Inflation, on its own. Gold is a real-rate hedge, not an inflation hedge; if rates rise faster than inflation, gold falls during an inflation episode. See how inflation affects markets.
• Mine supply. Annual production is a small fraction of above-ground stock; it sets nothing over a trading horizon.
• Jewellery season. Real, and swamped by the flows above.

Key Risks

• Event risk from the US calendar. Gold's largest moves are US rate moves.
• The dollar leg. A gold position is partly a short-dollar position; see correlated positions.
• Weekend gaps on geopolitical news, which can go either way.
• Contract size. One lot of gold is not one lot of EURUSD; see what is a lot.
• Financing on positions held for weeks.

How to Trade Gold at MarketsAll

XAUUSD is available on MetaTrader 5 and Web Trader across all account types, alongside XAGUSD and XPDUSD. Before a first position: read the contract specification, check the US calendar for the week, and size for a Fed-day move rather than a quiet day.

Is gold a safe haven?

In acute crises, yes — it is bought alongside the dollar and the yen. In slow-burn stress it is unreliable, because rising real yields can outweigh haven demand.

Why does gold fall when interest rates rise?

Because it pays no interest. Higher rates raise the return on the alternative, and gold's opportunity cost rises with them.

What is the best time to trade gold?

London and New York hours for liquidity; US data releases for movement, at the cost of wider spreads.

Does gold follow inflation?

It follows real rates. When inflation rises faster than nominal rates, gold tends to rise; when the central bank responds strongly, it can fall.

How big is one lot of gold?

Typically 100 troy ounces, but the contract size is set by the broker. Check the specification before sizing.

Related Guides

What is commodity trading · Gold, real yields and the US dollar · How the US dollar affects commodities · How inflation affects markets · Contract specifications on MT5 · Position sizing