What is a pip on gold (XAU/USD)? Pip, point and value per lot
Ask three gold traders what a pip is, and you may get three answers. That is not a problem, as long as you know which one your broker and your tools use.
Price, point and pip
Gold is usually quoted with two decimals.
- Point (tick): the smallest price step, usually 0.01. MetaTrader 5 measures stops and spreads in points.
- Pip: there is no single standard for gold. Many traders and tools call 0.10 a pip, some use 0.01, and some use 1.00.
What a move is worth per lot
With a 100 oz contract on a USD account:
| Price move | 1 lot | 0.10 lot | 0.01 lot |
|---|---|---|---|
| 0.01 (1 point) | 1 | 0.10 | 0.01 |
| 0.10 | 10 | 1 | 0.10 |
| 1.00 | 100 | 10 | 1 |
| 10.00 | 1,000 | 100 | 10 |
The general formula: value = lots × contract size × price move × the rate from USD to your account currency.
Reading your broker’s specification
In MetaTrader 5, open the symbol specification and look for:
- Contract size: ounces per lot, often 100.
- Digits: decimals in the price, often 2.
- Tick size and tick value: the smallest step and what it is worth per lot.
If the tick size is 0.01 and the tick value is 1 on a USD account, your contract is 100 oz.
Where the confusion costs money
- Points versus pips. A 500-point stop in MetaTrader 5 is a 5.00 move, not 50.00. Mixing the two makes your stop ten times wider or narrower than you meant.
- Copied settings. A setting written in pips by someone else may use a different pip than yours.
- Other contract sizes. Some brokers and account types use a smaller contract. The same lot size then risks less, and your usual numbers no longer fit.
A simple habit prevents all of this: think in price distance, like 5.00, and convert to points or pips only at the last step.