XAU/USD, what's the cost of a trade?

Hi

Can someone explain the total cost of a XAU/USD trade. Assuming spread and no commission broker.

My calculations are going haywire and I am not sure if I am doing it right.

Maybe you could post an example of how you calculate your costs?

With 1 lot a 10 cent move in the price of gold will result in $10 profit or loss.
Typical spread is 50 cents, so the cost of the spread is $50 on 1 lot.
But with some brokers, spread can widen excessively at times

I don't trade with Oanda and never will because of their terrible record of spread widening.
http://fxtrade.oanda.com/why/spreads/recent#XAU-USD

if u sell at 1456.20 u will get entry at 1455.70

if u buy at 1456.20 u will get entry at 1456.70..

.50 is spread at fxcm uk don't know about other brokers.

Hello all!

I work at FXCM and can shine some more light on the functionality of our XAU/USD product.

The contract itself is for 1 ounce of gold, so if the trade size entered is “1” then your P/L on the position will be impacted, penny for penny, by the price change in gold. If gold is at 1,395.25 and goes to 1,395.90, that is $0.65 profit (65 points).

If you are trading larger contract sizes, the P/L is multiplied by the trade size. For example, if you trade 2 ounces of gold, buying at 1,395.25 and selling at 1,395.90, that is a 0.65 move in the price, but that is $1.30 Profit (0.65 * 2 = 1.30).

Here’s another example: if you are trading 150 ounces of gold, selling at 1,390.00 and closing the trade at a loss at 1,395.50, the price moved against you 5.50, but that would equate to a loss of $825.00 (5.50 * 150 = 825.00).

Now, for the cost of a trade, keep in mind that the spread (as with all financial instruments) is variable. Typical spreads on XAU/USD is 0.50, which is 50 cents per ounce (1.00 for 2 ounces, 5.00 for 10 ounces, and so on).

Other instruments function differently (in terms of spreads and contract sizes). If you have questions about the other contracts that FXCM offers, please ask!

Thank you and best of luck trading!

Brad

I think that with most brokers, value of 1 lot is 100 ounces, so a trader should always check as they could be risking 100 times more than they realise.