Gold is quoted as XAU/USD. The letters XAU are the code the market uses for one troy ounce of gold, and USD is the currency the ounce is priced in. So the number on the screen is the price of one ounce in United States dollars, not the price of a coin, a bar, or a gram. When the quote reads 2,340.50, one ounce is worth 2,340.50 US dollars at that moment.

That single fact changes almost everything a beginner learned on a currency pair. AUD/USD moves in the fourth decimal place, so a move of 0.0001 is one pip. Gold moves in the second decimal place, so a move of 0.01 is one pip. The same word, pip, describes a much larger step. A gold pip is one hundred times the size of a currency pip in raw price terms.

The contract size is the second difference. One standard lot of gold is usually 100 troy ounces, and that figure varies between brokers. Some offer mini and micro contracts at 10 ounces and 1 ounce. Because the contract is priced in USD while your account is in Australian dollars, the value of each pip also depends on where AUD/USD sits. That is the chain of conversions this route walks through, one link at a time.

A quote has two sides. The bid is the price at which the market will buy from you, and the ask is the price at which it will sell to you. The gap between them is the spread, and it is a cost you pay the moment you open. On gold the spread is often wider than on a major currency pair, and it widens further around news releases and at the daily rollover.

Below the quote sits the contract size, shown as 100, 10 or 1. Below that sits the margin requirement, expressed as a percentage. Those two numbers decide how much of the position is your money and how much is borrowed. Leverage is simply the inverse of the margin percentage: a 1 per cent requirement is leverage of 100 to 1. ASIC sets limits on the leverage a retail client can be offered, and those limits differ by instrument, so check what your own platform displays rather than assuming.

The last item on the ticket is the value per pip, and on gold it is rarely a round number in Australian dollars. The platform calculates it from the contract size, the pip size of 0.01, and the current AUD/USD rate. That is why the figure can shift slightly between one trade and the next even when the lot size has not changed. Read it before you click, not after.

Most beginners carry one habit across from currencies: they decide a lot size by feel, then look at the stop. On gold that habit is expensive. A 100-ounce contract moves A$1 for every 0.01 of price when AUD/USD is near 0.6640, so a stop placed 5.00 away, which sounds small on a gold chart, is A$500 on one lot. The arithmetic is unforgiving because the contract is large and the pip is coarse.

The correct order is the reverse. Decide first the money you are willing to lose on the trade, as a fixed amount in dollars. Decide second where the stop belongs, based on the chart rather than on your account. Divide the first by the second to get the number of ounces, then round down to the nearest contract the platform offers. Position size is an output of those two decisions, never an input.

Gold also trades in sessions that behave differently. It is most active when London and New York overlap, and it reacts sharply to United States data and to central bank announcements. A stop that survives a quiet Asian session can be taken out in seconds during a release. This route puts sessions and the calendar last on purpose: you cannot judge whether a stop is sensibly placed until you know what the instrument does and what it costs to hold it.