XAUUSD Spread Explained
The XAUUSD spread is the gap between the bid and ask. How to read it in points and dollars, what it costs per lot, when it widens, and why it matters so much to automated strategies.
By the AURAX teamPublished 3 min read
On this page (5)
The spread is the difference between the price you can buy at (ask) and the price you can sell at (bid). On a two-decimal gold quote, a bid of 3000.00 and an ask of 3000.25 is a spread of $0.25, or 25 points. Every trade pays it once: a new position opens that far in the red. On one lot at 100 oz, a $0.25 spread costs $25.
spread cost = spread (in $) × contract size × lots
- $0.25 × 100 × 1 lot = $25
- $0.25 × 100 × 0.01 lot = $0.25
Part of the XAUUSD trading guide.
Reading the spread in MT5
MT5 shows spread in points — the smallest price step the symbol is quoted in. Right-click Market Watch → Columns → Spread to add it. The same spread looks different depending on how many decimals your broker quotes:
| Quote | Point size | A $0.25 spread shows as |
|---|---|---|
| 3000.25 | $0.01 | 25 points |
| 3000.250 | $0.001 | 250 points |
Always convert to dollars of price before comparing brokers or settings. What is XAUUSD explains points and pips on gold.
What the spread really costs
The spread is paid on every position, so its weight depends on how far a trade aims to go. For a trade aiming at $10, a $0.25 spread is 2.5% of the target. For a strategy aiming at $1 per trade, it is 25%.
| Target move | Spread $0.20 | Spread $0.40 | Spread $1.00 (news) |
|---|---|---|---|
| $1 | 20% | 40% | 100% |
| $3 | 6.7% | 13.3% | 33.3% |
| $10 | 2% | 4% | 10% |
This is why strategies that trade often and take small profits — scalpers, many grids — are the most spread-sensitive of all. A backtest run with an unrealistically tight fixed spread can turn a losing strategy into a winning one on paper.
When the spread widens
Most gold spreads are variable: they follow the liquidity your broker gets from its providers. They are usually tightest in the London and New York sessions and widen when liquidity thins:
- Around the daily break (about 17:00 New York time) — often the widest of the day, for several minutes either side. See XAUUSD trading hours.
- At the Sunday open, when the market restarts on thin volume.
- Around major releases — CPI, the jobs report, Fed decisions — for seconds to minutes.
- In fast, one-way markets, when providers pull quotes.
Spread, commission and account types
| Account style | How you pay | What to compare |
|---|---|---|
| Standard | Wider spread, no commission | The average spread in the hours you trade |
| Raw / ECN | Tight spread plus a fixed commission per lot | Spread + commission, per lot, round trip |
Compare total cost per lot per round trip, not the headline spread. A "zero spread" account with a commission is not free; a standard account with no commission is not cheaper just because the fee is hidden in the price.
Spread and automated strategies
An EA cannot see that a spread is unusual unless it checks. Good practice for any automated gold strategy:
- Refuse to open positions when the current spread is above a limit.
- Avoid the minutes around the daily break for new entries.
- Backtest with real tick data (which carries real spreads) or a pessimistic fixed spread, never with the tightest spread you have ever seen. See how to backtest an EA in MT5.
- Monitor spread in live trading; a broker's spread behaviour can change without notice.
Sources
- MetaTrader 5 Help — MetaQuotes