What is 1 Pip Value in Gold XAUUSD Trading Explained

What is 1 pip value & size in Gold XAUUSD trading?

Is it a 1-cent, 10-cent, or even 1-dollar price movement?

In this article, we will discuss why many traders and reputable analysts interpret pips in Gold differently.

Read carefully and learn how to calculate the value of 1 pip in Gold XAUUSD trade.

What is a PIP

Let's start with a definition of a pip.

Pip stands for "Price Interest Point".

In essence, it's the smallest standard incremental move in the price quote of a trading instrument.

Let's open Gold chart.

A current Gold price is 4583.82.

The smallest standard incremental move in gold price is 1 cent.

It means that 1 pip should be equal to 1 cent.

Contradictory Information

A confusion arises when we search for that information on google or ask AI.

In different sources, the information is controversial.

While some sources claim that 1 pip in Gold is 1 cent.

Some will claim that 1 pip is in fact 10 cents or a tenth of a cent.

The same thing will be with various signal providers, calculating their trading results in pips in different ways.

Why is that the case?

The answer lies in the origins of Gold XAUUSD trading.

Initially, Gold trading platforms and brokers displayed Gold price with just one digit after the decimal point.

And some of the brokers still do.

1 Digit XAUUSD Quote

A current Gold price with this broker is 4591.1.

The smallest standard incremental move in this price quote is 10 cents.

So, here 1 pip will be 10 cents.

2 Digits XAUUSD Quote

As trading platforms started to evolve, another digit after the decimal point started to emerge.

Here is how a Gold price is quoted with this broker.

The current price is 4584.80.

The smallest standard incremental move in this price quote is 1 cent.

1 pip will be 1 cent here.

3 Digits XAUUSD Quote

And the problem is that there are the brokers that quote Gold prices with even 3 digits after the decimal point.

Like here.

1 pip will be just 0.1 cent.

It is All About Broker

Because of different price quotations, 1 pip value varies dramatically in Gold trading.

From a broker to broker, the same price movement on Gold XAUUSD can be 12000, 1200, or 120 pips.

Main Problem

Unfortunately, there is no universal pip standard for Gold trading.

That is the main source of confusion.

Personally, I consider 10 pips Gold XAUUSD price movement to be 1 pip.

Such a value is convenient for calculating extended price movements.

My Advice

When you assess the results of some Gold signals group in pips, always ask how do they calculate a pip.

It will help you to better understand their profitability, as many scam signal providers will manipulate the statistics with that.

I hope that now you understand what is one pip in Gold trading and why it value & size varies so much.

Thank you for reading and good luck in trading XAUUSD.