XAU/USD

Gold is a monetary asset with no cash flow, and its character follows from that single fact. Because it pays no coupon and no dividend, nothing about owning it competes with an interest-bearing asset except the price itself, so gold strengthens when real interest rates fall and the cost of holding a non-yielding asset drops. It is priced in US dollars, which ties it mechanically to dollar strength. And it is held as a reserve and a haven, which means demand can rise on fear rather than on growth. Those three forces, not earnings, drive the price.

The behaviour that results is closer to a store of value than to a traded business. Gold trends rather than ranges when its drivers align in one direction, and the trends can run for years: the move from 2022 to 2026 carried the price to an all-time high. It carries volatility several notches above a major currency pair, with a typical GVZ implied-volatility reading of 22 to 27 on this page's zones, so a position that looks small in ounces can hold a large dollar exposure once the price is in the thousands.

Gold also trades almost continuously. The futures market runs close to 23 hours a day from Sunday evening to Friday afternoon (US Central time) with a one-hour daily break (4:00–5:00 p.m. US Central time), and over-the-counter gold trades on a similar cycle. Liquidity is deepest during the London and New York hours and around US data releases, and thinner overnight, when a smaller flow can push the price further than the same flow would during the active session.

Gold has no earnings to value, so its price is driven by three forces that have nothing to do with cash flow. The first is the real, inflation-adjusted US interest rate: because gold pays nothing to hold, a higher real yield raises the opportunity cost of owning it and weighs on the price, while a falling real yield lifts it. Next is the US dollar gold is priced in — a weaker dollar mechanically raises the dollar price of an ounce, and, as an illustrative relationship rather than a measured one, a 1% fall in the dollar has often lined up with a rise in gold of a similar size, a link that has also loosened since 2022. The third is demand for gold as a reserve and a haven: central banks bought 863 tonnes in 2025 according to the World Gold Council's full-year report, below the run of three straight 1,000-tonne years through 2024 but still well above the 2010–2021 average of 473 tonnes, and risk-off episodes pull capital toward the metal.

The textbook relationship is the real-yield one, and for two decades it was the reliable high-frequency driver of the gold price. Since 2022 it has broken down: real yields rose and gold rose with them, because heavy central-bank buying and a geopolitical risk premium more than offset the higher opportunity cost. A model built on the dollar and real rates alone implied a price well below where gold actually traded. The lesson for anyone reading a single indicator is that gold's drivers shift in weight across regimes. The real-yield signal still matters, but it has not been in charge.

Two patterns hold across most of gold's scheduled-event moves. The releases that move gold most are the ones that reprice the Fed's rate path: the FOMC decision, US CPI, and Non-Farm Payrolls. They reach gold through real yields and the dollar rather than touching it directly. The largest moves of all are unscheduled. A geopolitical shock or a liquidity crisis can move gold further in a session than any data print, in either direction, as the March 2020 sell-off and the rally that followed it both showed.

Gold is more volatile than a major currency pair and calmer than crypto. The regime bar below sets its typical zone at GVZ readings of 22 to 27, near where Cboe's gold volatility index has recently traded; on the square-root-of-252 rule that converts to a one-standard-deviation daily move of about 1.4% to 1.7%, roughly 58 to 71 dollars an ounce at an illustrative 4,200. Under a normal distribution the average close-to-close move is smaller, about 0.8 times that figure, and the average high–low range within the day is larger, about 1.6 times it. Volatility clusters rather than arriving evenly: long quiet stretches give way to fast moves when a macro regime turns.

The forward-looking gauge for that volatility is the GVZ, the Cboe Gold ETF Volatility Index. It applies the same methodology as the equity VIX to options on a large gold exchange-traded fund, so it reads as the market's expected 30-day volatility for gold. A low reading marks a calm regime; a sharp spike marks stress, as in the 2008 financial crisis and the March 2020 liquidity crunch. Traders can use the GVZ the way index traders use the VIX — as a read on which regime the market is in before sizing a position or setting a stop-loss.

The tightest spreads and the heaviest volume sit in the London–New York overlap, under the common session convention 13:00–17:00 UTC on standard time (12:00–16:00 UTC while both the UK and the US are on daylight saving time, and 12:00–17:00 UTC in the weeks when only the US is), where the afternoon of the London session (08:00–17:00 UTC on standard time under the same convention) runs alongside the New York open. Outside that overlap the spread widens as market-maker depth retreats, and a headline that arrives in a thin overnight session can move the price further than the same news would during the active hours.

The dangerous regime arrives fast. When the daily move pushes above 2.5% and the GVZ jumps, a stop sized for a calm tape is too tight to survive normal noise, and last week's prudent position size is this week's oversized one. At a fixed dollar risk, the position size falls in proportion as the stop widens: a stop 2.5 times wider needs 40% of the original size.

Gold grinds and then moves fast, in both directions. The three documented events below show the scale of risk a leveraged position can run against a small account. The account examples use a $5,000 account and one standard lot of 100 ounces, where each $1 of price is worth $100.

The pattern across all three is the lesson the other markets teach. Position size relative to account equity sets what each move costs; the leverage ratio sets the margin held and where the stop-out falls. An account that survives moves of this size in gold is one that risked a small fraction of equity per trade and used a stop that genuinely capped the downside.

A long gold position carries indicative, regime-dependent relationships to other markets. They are useful for understanding what the position is exposed to, not for hedging it.

Of the macro relationships, the inverse link to the US dollar has been one of the more consistent historically, though it has also loosened since 2022. Gold is quoted in dollars, so dollar strength and gold tend to move in opposite directions, and it is the relationship to watch when no gold-specific catalyst is in play.

The relationship most traders cite, gold against real yields, is the one to handle with care. For two decades a rising real yield reliably pulled gold down. Since 2022 that link has decoupled: real yields and gold have risen together, as central-bank demand and geopolitical risk overrode the opportunity-cost signal. Reading gold off real yields alone would have been wrong for several years running.

Silver is the closest mover to gold, but it is not a substitute. It carries heavy industrial demand and trades with more volatility, so it amplifies gold's swings in both directions and offers weaker protection when markets fall. The gold-silver ratio, the number of silver ounces one gold ounce buys, is the standard way traders track the spread between the two.

The 'digital gold' framing for bitcoin does not hold up in the data. Their correlation drifts between mildly negative and mildly positive and changes sign without warning, and in a risk-off shock bitcoin has traded as a risk asset while gold has tended to hold its ground, although both fell together in the March 2020 scramble for cash. They are not interchangeable haven assets.

Gold at an illustrative 4,200 an ounce, one standard lot of 100 troy ounces, 420,000 dollars of notional. Maximum gold leverage varies widely by broker: many set it well below the level they offer on major FX pairs, while others offer the higher 1:100-and-above tiers shown below. The margin reserved depends on the leverage:

A 1% move on this position, about 42 dollars an ounce, costs $4,200 whatever the leverage while the position stays open. At 1:100 that equals the margin held; at 1:500 it is five times the margin held. High leverage does not change what each dollar of price movement costs. It lowers the margin held, which moves the broker's stop-out further away, so the same position on the same account can run a larger loss before it is closed. High leverage also removes the margin barrier that would otherwise stop a trader opening a 420,000-dollar position against a small account.

The entry cost on gold is the spread, plus a per-lot commission on commission-based accounts; both vary by broker. Brokers quote the spread in cents or dollars of the gold price, and it widens outside the deep London–New York overlap, around the daily break, and through high-impact US data. On an instrument with a one-standard-deviation daily move of about 1.4% to 1.7%, a wide spread matters less per trade than on a calm currency pair, but it compounds quickly for anyone trading often and is worst exactly when liquidity is thinnest.

Financing is the overnight carry. A gold CFD held past the daily rollover is charged a swap adjustment that reflects the US dollar interest rate net of gold's lease rate, with the broker's markup on top. The charge is usually a debit on the long side and varies materially by broker; brokers commonly apply a triple charge on one weekday to cover the weekend, and the weekday varies by broker, while some charge every calendar night instead. Over a multi-day hold it accumulates and should be counted before entry, not discovered after.

Gold is not quoted in pip units the way a currency pair is, so express its sensitivity through the value of a one-dollar move instead. A $1 change moves $100 on a 100-ounce standard lot, $10 on a 10-ounce mini lot, and $1 on a 1-ounce micro lot. Working in dollars per ounce stays consistent across brokers, whatever they call the smallest increment.