Gold Contract Specifications: 7 Lines That Set Your Costs

Two platforms can show the same gold price and still charge you very different amounts to trade it. The difference hides in the gold contract specifications, a short table most traders never open. Seven lines in it decide what one lot is, what a trade costs and how long you can afford to hold it.

This guide reads those lines one at a time and turns each into dollars on a real-sized trade. It uses the site's shared example: a $2,400 account, 0.10 lots and 1:500 leverage, with gold at $4,300. All spec values below are illustrative, not any broker's actual terms.

Where to find the gold spec sheet

There are two places, and it pays to check both. The broker's website usually has a contract specifications page per account type. The trading platform has its own version, and that one reflects what your account actually uses.

• In MetaTrader 4 or 5, open Market Watch, right-click the gold symbol and choose Specification.
• On the broker's site, look for Contract Specifications or Trading Conditions, then pick your account type.
• If the two disagree, the platform is what your trades will use. Ask support to explain the difference in writing.

Spec sheets differ between account types at the same broker. Always read the one for the account you will trade on, not the headline marketing page.

Contract size and digits: what one lot and one pip really are

The contract size is how many troy ounces (31.1035 g each) one lot represents. On most XAU/USD CFD (contract for difference) specs, it is 100 ounces. Do not assume it, though. Read the number, because every other calculation depends on it.

With 100 ounces, one lot moves $1.00 for every $0.01. At 0.10 lots, that is $0.10 per $0.01, or $10 for a full $1.00 move in the price.

The pip and point trap

Here the industry disagrees with itself. The digits line tells you how many decimals the price shows. On a two-decimal quote like 4300.25, the smallest step is $0.01. PipsMorrow calls that step a pip, the smallest price unit used to count moves.

Many platforms call the same $0.01 step a point, and some educators call $0.10 a pip. A "30-pip stop" can therefore mean $0.30 or $3.00, a tenfold difference. On a three-decimal quote, a point shrinks again to $0.001.

The same spec area lists the minimum lot and the lot step, typically 0.01 each. A 0.01 lot is one ounce, the smallest position most accounts can open. The lesson on trading XAU/USD on a forex platform covers these units in more depth.

Spread: the cost you pay on every gold trade

The spread is the gap between the price you can buy at and the price you can sell at. You pay it the moment a position opens, because you buy at the higher price and could only sell at the lower one.

Spec sheets show spread in one of three ways: a typical or average figure, a minimum, or "floating". A minimum spread is a best case, not a promise. The live quote is what counts.

Now compare that with a risk budget. On the $2,400 account, 1% risk is $24. A 30-point spread on 0.10 lots is $3.00, or one-eighth of the whole budget, paid before the trade moves. The smaller your stop and target, the larger that share becomes.

When the gold spread widens

Spreads are not fixed through the day. They tend to widen at the daily rollover, when liquidity is thin, and around big US releases such as CPI, jobs data and Fed decisions. Most brokers roll over at the New York close, 5 p.m. ET (21:00 or 22:00 UTC, depending on US daylight saving), which many platforms show as midnight server time.

The lesson on how to check a broker before you deposit shows how to record the live spread yourself at the hours you trade. That record beats any figure on a marketing page.

Swap: the overnight cost of holding gold

The swap is a charge or credit applied to any position still open at the daily rollover. On gold, holding a buy position usually costs money, because the position is financed like a loan in US dollars. The spec sheet shows two numbers, swap long for buys and swap short for sells.

Check the swap type line too. In MetaTrader 5, swaps can be set in points, in money or as an annual interest rate. The same number means different things under each type.

Worked example in points

Say the sheet shows swap long of -45.00 in points. On a two-decimal quote with a 100-ounce lot, each point is $1.00 per lot per night. So 0.10 lots costs 45 × $1.00 × 0.10 = $4.50 per night.

Look at the last row. Holding 0.10 lots for one trading week costs $27 in swap, more than the entire $24 risk budget. For anyone holding gold for days, swap matters more than spread.

Worked example as an interest rate

Some sheets state swap as an annual percentage of the position value. At $4,300, 0.10 lots is worth $43,000. An illustrative -5% a year, divided over a 360-day year, costs about $5.97 per night. Because it scales with price, this cost rises as gold gets more expensive.

Margin, leverage and trading hours for gold

The margin line says how much deposit a position needs. It may be written as leverage (1:500), as a percentage (0.2%) or as a fixed amount per lot. Gold often has its own leverage limit, lower than the account's headline figure. Leverage is the ratio between position value and the deposit, called margin, that holds it open.

Lower leverage does not make a trade riskier or safer on its own. It changes how much margin sits locked up, and so how much room you have before a margin call. The lesson on leverage and margin explains the stop out level, the other margin line on the sheet.

The small print that still matters

• Trading sessions. Gold usually trades Monday to Friday with a short daily break near the New York close, usually around 5 p.m. ET (21:00 or 22:00 UTC). Your platform may show it in server time, so check the offset.
• Stops level. The minimum distance allowed between the price and your stop or limit order.
• Commission. Raw-spread accounts charge a fee per lot, often quoted per side or per round turn.
• Maximum lot. The largest single order, which rarely matters to a beginner.

Comparing two gold spec sheets, side by side

A fair comparison uses one trade size and one holding period, then adds every cost. Here are two illustrative accounts, both with the same -45 point swap long.

1. Account A: 30-point spread, no commission.
2. Account B: 12-point spread plus $7.00 commission per lot, round turn.

The lesson is simple. Match the comparison to how you trade. A day trader should weigh spread and commission. A swing trader should weigh swap first. The full cost breakdown is in the lesson on what a trade really costs.

Once you know your costs, the next question is size. The guide on sizing a position to the risk you can afford picks up from here.

Frequently asked questions

Is one lot of gold always 100 ounces?

Usually, but not always. Most XAU/USD CFD specifications use 100 troy ounces per lot, while some account types use a different size. Read the contract size line on your own platform before you calculate anything.

Is a gold pip $0.01 or $0.10?

Both conventions exist. PipsMorrow and many platforms count the $0.01 step, while some educators call $0.10 a pip. Convert any pip or point figure to dollars of price first, and the confusion disappears.

Why is the swap on gold buys usually negative?

A gold CFD buy is financed like a US dollar loan, so the holder pays interest each night. Sell positions can receive a credit or pay a smaller charge. The exact figures change with interest rates, so check the sheet regularly.

What is a good spread for gold?

There is no fixed number, because gold spreads move with price, liquidity and news. Compare the live spread at the hours you actually trade, and set it against your risk per trade. A spread that eats a large share of your stop is too wide for that strategy.