Pip in gold trading
A pip is a small unit of price change; on gold most platforms treat $0.10 as a pip and $0.01 as a point, but definitions vary, so check yours.
Also called Pipette
A pip (short for “percentage in point”) is the standard unit for measuring price moves in forex. For most currency pairs it is the fourth decimal place. Gold has no agreed convention: some platforms call a $0.01 move one pip, others call $0.10 one pip and $0.01 a point or pipette. The dollar value of a move is what matters, and it does not change with the label.
How it applies to gold trading
On a 100-ounce standard lot, a $0.01 change in XAUUSD is worth $1 and a $0.10 change is worth $10. Suppose gold moves from 4,000.00 to 4,003.50. That is $3.50, or 350 “points” of $0.01, or 35 “pips” of $0.10. On one standard lot the profit or loss is $350 whichever word you use; on a micro lot it is $3.50.
Because of the ambiguity, many experienced gold traders plan in dollars per ounce rather than pips. A stop “30 pips away” is meaningless until you know whether that means $0.30 or $3.00. A stop “$3 away” is unambiguous.
When reading a lesson or a signal that quotes pips, the first question to ask is which platform convention the author uses; if it is not stated, the figure cannot be used safely.
A common mistake
Copying a pip-based stop or target from a strategy written for forex, or from a trader whose platform uses a different pip size, and ending up with a stop ten times tighter or wider than intended.
See also: Point, Pip value, Tick, Lot.
Frequently asked questions
How much is one pip worth in gold?
If your platform treats $0.10 as a pip, one pip is $10 per standard lot, $1 per mini lot and $0.10 per micro lot. If it treats $0.01 as a pip, divide those by ten.
Why do platforms define gold pips differently?
Gold is not a currency, so the forex convention of the fourth decimal place does not apply. Each platform chose its own convention when it added gold to a system built for forex pairs.
Should I measure gold moves in pips or dollars?
Dollars per ounce is unambiguous and is what the professional market uses. Pips are fine as long as you know your platform’s definition and never copy pip counts between platforms.