In the Forex market, gold (MT4 symbol XAUUSD) is considered a form of currency, and so is silver (MT4 symbol XAGUSD). Trading in gold is electronic, the same as other currencies. Spot gold and silver is traded in a similar way to margin FX although are still classified as a CFD product.
Spot gold and silver can only be traded against United States dollars (USD). Prices are always expressed in terms of the US dollar. Like foreign currency rates, trading spot gold and silver does not require the “physical” purchase or sale of the underlying commodities. You do not purchase gold that you can hold.
The trading method for gold is called ‘over the counter’ or OTC. OTC deals are not part of the Stock or Futures Exchange of any country and so the deals are not controlled by the same methods as the Exchange. OTC trading is performed directly between the seller and the buyer.
|MT Code||Market Name||Open (GMT+2)||Close (GMT+2)||Break (GMT+2)|
|XAUUSD||Gold||Monday 01:00||Friday 23:00||00:00-01:00|
|XAGUSD||Silver||Monday 01:00||Friday 23:00||00:00-01:00|
The price of gold is measured by its weight. The price shows how much it costs for one ounce of gold in US dollars. For example, if the gold (XAUUSD) price is $1600.00, it means that an ounce of gold is traded at US$1600.00. Similarly, the price of silver is its price per ounce in USD. If the silver (XAGUSD) price is 28.00, it means that an ounce of silver is traded at US$28.00.
If you have bought gold for $1600, you do not have an ounce of gold that you can hold, but you rather have the obligation to buy XAU at US$1600. When you close your position, you sell the XAU (gold) and close your exposure. If you sell it for $1605.00, you have made profit of $5 for every ounce (unit) of gold in your contract. The same theory applies to silver trading. If you have bought silver (XAGUSD) for $28.00 and sell at $28.50, you would have made a profit of $0.50 for every ounce of silver in your contract. Trading in gold and silver is easy with AxiTrader. To establish an account to trade gold (XAU) or silver (XAG), open an account NOW.