What is XAUUSD?

Jakarta, Pintu News – In the trading world, gold is not only traded in physical form, but also as derivative instruments and currency pairs. One of the most popular instruments is XAUUSD, which is widely used by global traders to speculate on gold price movements.

With high volatility and huge liquidity, XAUUSD is often a top choice for both novice and professional traders. This article will discuss the meaning of XAUUSD, the value of 1 lot of XAUUSD, as well as how to trade XAUUSD practically, including its alternatives in the crypto ecosystem.

What is XAUUSD?

XAUUSD is a trading symbol that represents the price of gold (XAU) against the United States dollar (USD). In this pair, XAU represents one troy ounce of gold, while USD is the currency of comparison. In other words, the XAUUSD price shows how many US dollars it takes to buy one troy ounce of gold. This instrument is commonly traded in the forex and CFD markets.

XAUUSD is often used as asafe haven asset, especially during times of global economic uncertainty. Its price movements are influenced by various factors, such as the Fed’s interest rate policy, inflation, the value of the US dollar, and geopolitical conditions. Because of these characteristics, XAUUSD is known for its high volatility, which opens up both profit opportunities and risks for traders.

Read also: What is a Delegator in Crypto?

How much is 1 Lot of XAUUSD worth

In standard forex trading, 1 lot of XAUUSD is generally equivalent to 100 troy ounces of gold. This means that if the price of XAUUSD is at US$2,000 per ounce, the contract value of 1 lot is around US$200,000. A price change of US$1 in XAUUSD will result in a change in value of around US$100 per lot.

However, many brokers also provide smaller lot sizes, such as 0.1 lot (10 ounces) or 0.01 lot (1 ounce), to suit retail traders’ capital. With leverage, traders do not need to provide the entire value of the contract as capital. However, leverage also increases risk, so understanding lot sizes and risk management is very important when trading XAUUSD.

Read also: What is a Terminal Token?

How to Trade XAUUSD and its Alternatives in Crypto

XAUUSD trading is generally done through forex or CFD brokers using technical and fundamental analysis approaches. Traders utilize price charts, technical indicators, and economic data releases to determine when to buy and sell. Popular strategies include trend-following trading, capitalizing on news volatility and hedging against US dollar movements. Risk management discipline is key as XAUUSD can move very quickly.

As an alternative in the age of digital assets, exposure to gold can now also be gained through tokenized gold such as Tether Gold (XAUT). XAUT is a physical gold-backed crypto asset, where each token represents ownership of professionally stored gold.

Through platforms like Pintu, users can purchase and store XAUT at more flexible amounts without the need to manage physical gold. This approach provides easy access to gold with blockchain transparency, while combining the safe haven characteristics of gold and the efficiency of the crypto ecosystem.

Conclusion

XAUUSD is a popular instrument for trading the price movement of gold against the US dollar, with large contract values and high volatility. Understanding the definition of XAUUSD, the value of 1 lot, as well as the trading mechanism is essential before jumping into this market.

On the other hand, the proliferation of crypto presents alternatives such as XAUT that allow for more flexible and digitized gold exposure. By understanding the various options, traders and investors can choose the instrument that best suits their risk profile and investment objectives.

That’s the latest information about crypto. Follow us on Google News to get the latest crypto news about crypto projects and blockchain technology. Also, learn crypto from scratch with complete discussion through Pintu Academy and stay up-to-date with the latest crypto market such as bitcoin price today, xrp coin price today, dogecoin and other crypto asset prices through Pintu Market.

Enjoy an easy and secure crypto trading experience by downloading Pintu crypto app via Google Play Store or App Store now. Also, get a web trading experience with various advanced trading tools such as pro charting, various types of order types, and portfolio tracker only at Pintu Pro.

*Disclaimer

This content aims to enrich readers’ information. Pintu collects this information from various relevant sources and is not influenced by outside parties. Note that an asset’s past performance does not determine its projected future performance. Trading crypto carries high risk and volatility, always do your own research and use cold hard cash before investing. All activities of buying and selling bitcoin and other crypto asset investments are the responsibility of the reader.

Reference:

• Broker LiteFinance Indonesia