Key takeaways
- Gold is quoted in US dollars per ounce. In this lesson 1 pip = $0.10, but brokers use different conventions, so plan in dollars.
- On a common contract of 100 ounces per lot, each $1 move is worth $100 per lot, or $10 per $0.10 pip.
- Gold often swings sharply around US data at 08:30 ET and around the 09:30 ET stock open, so many traders avoid entering on the release itself.
- Gold has tended to move opposite to the US dollar and US real yields, but the relationship weakens or breaks at times.
- Stops on gold are usually wider than on EUR/USD in pip terms, so position size must be smaller to keep the same dollar risk.
Contents
Gold is one of the most widely traded instruments among ICT students. It trends well, sweeps obvious highs and lows often, and reacts strongly to US news. The same features that make it attractive also make it dangerous: a normal intraday move in gold can be several times larger, in dollar terms per lot, than a typical move in EUR/USD. This lesson covers the practical adjustments you need before applying familiar ICT ideas to XAU/USD.
What it is
Pricing. XAU/USD is the price of one troy ounce of gold in US dollars, for example 2,641.90. A move from 2,641.90 to 2,642.90 is a $1.00 move.
Pip conventions. There is no single standard. In this lesson 1 pip = $0.10, so a $1.00 move is 10 pips. Some brokers call $0.01 a point or pip, and some traders simply talk in dollars. Because the labels differ, the safest habit is to plan every stop and target in dollars and convert only when needed. You can check the value of a move with the Pip Calculator.
Contract size. Many brokers use 100 ounces per standard lot. On that basis, $1.00 of movement is worth $100 per lot, and a $0.10 pip is worth $10 per lot. A 0.01 lot is 1 ounce, so $1.00 of movement is worth $1. Confirm your own broker's specification.
Volatility and timing. Gold often moves sharply around US releases at 08:30 ET (such as CPI and employment data) and at the 09:30 ET stock open. The London kill zone (02:00–05:00 ET) and the New York AM kill zone (07:00–10:00 ET) are the windows many traders watch; see ICT kill zones.
Intermarket links. Gold pays no interest and is priced in dollars, so it has often moved opposite to the US Dollar Index and to US real yields. That relationship changes over time and can break for weeks. ICT traders use it as context and for comparison, as covered in intermarket analysis and the DXY. You can also follow the market on the gold price and dollar index pages.
How to identify it
A practical gold checklist:
- Know your contract. Write down the dollar value of a $1 move per lot.
- Check the calendar. Note any 08:30 or 10:00 ET releases and decide whether you will be flat through them.
- Mark liquidity. Asian and London highs and lows, equal highs or lows, and the previous day high and low.
- Set bias from the daily and 4-hour charts, and glance at the dollar for agreement.
- Wait for a sweep of one obvious pool, then displacement in the opposite direction.
- Mark the fair value gap the displacement leaves, and use it for a limit entry.
- Place the stop beyond the sweep with a buffer for gold's wider noise, often $0.50 to $1.50 rather than a few cents.
- Size from the dollar risk, not from the lot size you used last time.
Worked example: XAU/USD buy-side sweep after US data
All prices are illustrative.
- Context: daily bias is bearish. The previous day low at 2,612.00 is the draw on liquidity.
- London highs: equal highs at 2,646.20 and 2,646.40, an obvious pool of buy-side liquidity.
- News: a US release at 08:30 ET produces a fast two-way spike. The trader stays out.
- Sweep: at 09:05 ET price runs to 2,649.10, above the equal highs, then stalls.
- Displacement: by 09:20 ET price drops through a swing low at 2,638.00, leaving a bearish fair value gap from 2,640.50 to 2,643.30.
- Entry: a sell limit at 2,641.90, the midpoint of the gap.
- Stop: 2,650.10, $1.00 above the sweep high. Risk = 2,650.10 − 2,641.90 = $8.20, or 82 pips.
- First target: 2,630.00, a session low, $11.90 away, about 1.45 times the risk.
- Final target: the previous day low at 2,612.00, $29.90 away, about 3.6 times the risk.
Sizing. With a $10,000 account risking 1% ($100), one 100-ounce lot risks $8.20 × 100 = $820. Size = $100 ÷ $820 ≈ 0.12 lots, which risks $98.40.
Compare that with a typical EUR/USD day trade with a 20-pip stop, where 0.50 lots risks $100. The gold trade uses less than a quarter of the lot size for the same dollar risk. That is the most important adjustment when moving from currencies to gold.
How traders use it
- Wait out the release. Many traders let the 08:30 ET spike finish, then look for a sweep and displacement in the next 30 to 90 minutes.
- Silver Bullet on gold. The 10:00–11:00 ET hour is a popular window for the ICT Silver Bullet on XAU/USD.
- Dollar as a check. A gold sweep that coincides with a dollar move in the opposite direction gives extra context; a mismatch is a reason for caution.
- Partial profits. Gold can reverse quickly, so some traders take part of the position at the first internal level.
- Fixed dollar risk. Using the Position Size Calculator on every trade prevents oversized positions.
Common mistakes
- Copying EUR/USD lot sizes. The same lot size can carry four or five times the risk.
- Mixing pip definitions. A "50-pip stop" means different things on different platforms. Use dollars.
- Stops too tight. A $2 stop on gold during New York is often inside normal noise.
- Entering on the news candle. Spreads widen and slippage is common around releases.
- Treating the dollar link as a rule. Gold and the dollar sometimes rise together.
Summary
ICT concepts work the same way on gold as on currencies: liquidity, sweep, displacement and a fair value gap entry toward the next pool. What changes is scale. Price is in dollars, pip labels vary (here 1 pip = $0.10), and moves around 08:30 and 09:30 ET can be large. Plan stops and targets in dollars, leave room beyond the sweep, use the dollar and yields as context rather than signals, and make position size smaller so that a single trade never risks more than you planned.
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Practice worksheet
Practice worksheet
5 exercises to try on paper. Print it, save it as a PDF from the print dialog, or download a plain-text copy.
- Check your broker's contract size for XAU/USD and write down what $1 of movement is worth per lot and per 0.01 lot.
- For ten sessions, measure the high-to-low range of gold from 08:30 to 11:00 ET and compare it with EUR/USD over the same hours in pips and in dollars per lot.
- Mark equal highs or lows formed in the London session and note how often New York swept them before 11:00 ET.
- Put the Dollar Index next to gold for one month and note three days when they moved the same way instead of opposite.
- Plan one past gold setup in full, including stop in dollars and size for 1% risk.
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