Need help calculating pips for gold

Hi guys, I intend to start trading gold, but could anyone be kind enough to explain how to calculate its pips?

B
@brenda_lesotho - 4 months ago

Oh I forgot to mention I am trading the XAU/USD combo

H
@headies25284 - 4 months ago

Pls can you be more clearer with your question.

B
@brenda_lesotho - 4 months ago

Okay, like from my screenshot the spread on xauusd is 0.4 pips but what is the USD value of this 0.4 pips when trading 0.1 lot size?

H
@headies25284 - 4 months ago
Quoted - headies25284

4dollar is the answer. I will help you with the calculation.

Gold contract size

1.0 lot = 100 oz

0.1 lot = 10 oz

Spread cost formula

Spread cost = Spread × Ounces

spread is 0.4

So:

Spread cost = 0.40 × 10

Spread cost = $4.00

The 0.40 spread on XAUUSD at 0.1 lot = $4.00 cost.

This means when you open a 0.1-lot gold trade, you start the trade –$4 because of the spread.

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