Gold (XAU/USD) is one of the most heavily traded instruments in the world, quoted in US dollars per troy ounce (31.1 grams). It sits in a unique position: not quite a currency, not quite a commodity, and treated by markets as a store of value and crisis hedge.
Contract Basics
| Property | Typical value |
|---|---|
| Quote unit | USD per troy ounce |
| Standard lot | 100 oz per lot (broker-dependent) |
| Typical daily range | $15-$30 in calm markets, $40+ in volatile periods |
| Trading hours | Nearly 23 hours a day, Sun 22:00 UTC - Fri 21:00 UTC |
What Drives Gold
- 1.Real interest rates — gold pays no yield, so when inflation-adjusted bond yields rise, holding gold becomes relatively less attractive and it tends to fall; falling real yields tend to lift gold.
- 2.US dollar strength — gold is priced in USD, so a stronger dollar often makes gold more expensive for holders of other currencies, pressuring demand and price.
- 3.Safe-haven demand — geopolitical crises, banking stress, or equity sell-offs typically drive flows into gold.
- 4.Central bank buying — many central banks hold and periodically add gold reserves, providing a structural demand floor.
- 5.Inflation expectations — gold is often (imperfectly) viewed as a long-term inflation hedge.
Gold and the US dollar are usually inversely correlated, but during acute crises both can rise together as investors seek safety in both simultaneously. Don't assume the correlation always holds — check it against the current macro regime.
Sessions & Liquidity
Gold trades nearly around the clock but liquidity concentrates during the London and New York sessions, roughly 07:00-21:00 UTC, when major physical and futures markets overlap. The Asian session tends to be quieter with lower volatility, occasionally punctuated by Chinese demand-related moves.
Key Data to Watch
- ▸US CPI and PCE inflation releases.
- ▸Federal Reserve rate decisions and speeches (drives real yield expectations).
- ▸US Treasury yield moves, especially the 10-year.
- ▸Geopolitical headlines and risk-off equity sell-offs.
Because gold reacts strongly to geopolitical news, weekend headlines can produce significant gaps at the Sunday open. Traders holding positions over the weekend should size accordingly.