Two things every gold trader should know before placing a trade: what XAU actually means, and what a troy ounce is. Both appear in every price quote you will ever see for gold, yet most beginners never have them explained. This article covers both in plain terms, with no jargon.
What XAU means
XAU is the official currency code for one troy ounce of gold. It is built from X, the prefix used for codes that are not national currencies, plus Au, the chemical symbol for gold. When you see XAUUSD on MT5, you are looking at the price of one troy ounce of gold in US dollars. Buying XAUUSD means you expect that price to rise; selling means you expect it to fall.
What a troy ounce is
A troy ounce is exactly 31.1034768 grams. It is slightly heavier than the ordinary ounce used for food and body weight, and it is the unit in which gold's price is quoted around the world. So when gold is quoted at a certain number of dollars, that figure is for one troy ounce, not a standard ounce and not a gram.
Why it matters for your trades
Understanding the unit stops a lot of confusion. The price on your chart is per troy ounce, your lot size determines how many ounces you are effectively trading, and the two together decide what each dollar move is worth to you. Get that clear and lot sizing stops feeling abstract. Learn the basics with us in the free community, where questions like these are welcome any time.
Key takeaways
- XAU is the currency code for one troy ounce of gold
- The code combines X with Au, gold's chemical symbol
- A troy ounce is exactly 31.1034768 grams
Common questions
What does XAUUSD mean?
It is the price of one troy ounce of gold (XAU) quoted in US dollars (USD). It is the symbol you trade on MT5 when trading gold.
How many grams are in a troy ounce?
Exactly 31.1034768 grams, slightly more than a standard ounce.
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