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XAUUSD combines strong intraday movement, competitive spreads, deep liquidity, extensive trading hours and fast, ultra responsive execution. That combination can suit a wide range of strategies, from scalping and day trading to swing, momentum and trend-following approaches.
Pepperstone clients can also access gold through multiple markets, including non-USD-denominated XAU crosses, Gold Perpetual CFDs, ETF CFDs and gold equity CFDs.
Why traders are drawn to XAUUSD
XAUUSD consistently ranks among the highest-volume markets traded by Pepperstone clients.
Why?
For active traders, movement matters. But movement alone isn't enough. Trading costs, liquidity, execution quality and range of trading platforms/charting matters.
XAUUSD brings those characteristics together in one highly liquid market.
Our client data shows how traders respond: Increased range expansion, outsized ROC and persistent trend leads to increased trading activity, and holding periods can be remarkably short.
More than one way to trade gold
XAUUSD attracts the most attention, but traders have several ways to express a view on gold.
XAU denominated in another G10 currency allows traders to take a view on gold without being tied exclusively to the US dollar. If a trader expects both gold and the USD to strengthen, for example, they may prefer to express that view against a currency they expect to underperform, such as XAUEUR or XAUJPY.
Gold Perpetual CFDs offer another alternative, providing two-way exposure during periods when conventional gold markets are closed, including weekends.
Weekend activity remains relatively low, but as participation in perpetual markets develops and liquidity deepens, weekend gold trading could become increasingly relevant.
Pepperstone clients can also gain exposure through selected gold ETF CFDs and CFDs on listed gold mining companies across different global exchanges.
These can offer a familiar product for individuals who may have invested in these companies before but have since become more active in their approach and want to use leverage in their trading.
Which product is appropriate ultimately depends on the trader's strategy, timeframe and risk tolerance.
Movement versus cost: where gold stands out
This is perhaps the most important part of the gold story.
CFD traders are drawn to movement. But what really matters is how much movement they get relative to the cost of accessing it.
Using August data, we compared the average daily high-to-low range of popular markets with their average spread. Put simply, how much price movement did traders get relative to the spread?
XAUUSD stood out.
The NAS100 also ranked strongly, but gold's combination of comparatively tight spreads relative to the typical high-low price ranges produced a particularly attractive movement-to-cost profile.
A market can be volatile, but if the cost of accessing that volatility is high, the opportunity becomes less attractive. Gold combines movement with competitive trading costs, and that helps explain its popularity.
Gold traders move fast
Pepperstone's holding-period data provides another important insight.
Across all XAUUSD trades in August, the median position was held for just 4.7 minutes. Some 51.2% of trades were closed within five minutes, while 23.3% lasted less than one minute.
To reduce the influence of ultra-active traders placing large numbers of trades, we also calculated the median holding period for each individual trader, giving every trader equal weight.
The median hold time increased to 12.4 minutes, while 30.5% of traders still had a median holding period below five minutes.
Whichever way we cut the data, the message is clear: XAUUSD is heavily used as a short-term trading market.
Scalping and active intraday strategies feature prominently, alongside faster swing and momentum strategies.
What short-term gold traders need
When positions are held for minutes rather than months, three things become critical:
- The cost to trade
- Liquidity and pricing
- Control and quality of execution
XAUUSD at Pepperstone combines competitive spreads with strong top-of-book liquidity and responsive execution across multiple trading platforms.
XAUUSD is also open 23 hours a day, in line with CME gold futures, giving traders across global time zones extensive market access.
For scalpers and higher frequency day traders, those characteristics matter.
Gold trading never really sleeps
Gold is a genuinely global trading market.
APAC-based Pepperstone clients consistently account for the largest volume and notional exposure, followed by Australian, Middle Eastern and European clients.
Liquidity and participation rotate through Asia, Europe and the US, creating different trading opportunities throughout the day.
When does XAUUSD move most?
Our August pricing data highlights when gold tends to experience its strongest hourly moves.
The biggest movement occurred around the transition into US trading, particularly between approximately 10pm and midnight AEST.
That makes sense. Major US economic releases frequently hit during this window, while institutional participation and liquidity are typically high.
Another notable period is around 11am AEST, coinciding with the opening of the Shanghai gold futures market.
For active traders, these periods can offer a powerful combination of increased participation, liquidity and price movement.
Traders follow the movement
Australian client flows tell a similar story.
The largest concentrations of positions being opened and closed tend to occur around the same periods when underlying gold price movement increases.
That suggests active traders are responding to movement and liquidity rather than simply positioning around individual fundamental events.
For short-term traders, sometimes the fact that gold is moving matters more than why it is moving.
What actually drives gold?
Gold has no single, permanent fundamental driver.
At different times, price can respond to interest-rate expectations, bond yields, the US dollar, inflation expectations and broader risk sentiment.
Central-bank demand can also be important, particularly purchases from China and other emerging-market nations. ETF flows, futures positioning, portfolio diversification and options dealer hedging can all influence price.
The challenge is that these relationships constantly change.
A factor that dominates gold today may have far less influence tomorrow.
For active traders, that makes price action itself an important source of information.
One market, multiple strategies
There is no single way to trade gold.
Scalpers can target very short-term moves. Day traders can focus on periods of elevated liquidity and event risk. Swing traders can target multi-session moves, while momentum and trend followers can participate when gold develops persistent directional trends.
That versatility is another reason XAUUSD attracts such a broad range of traders.
Weekend gold is one to watch
Weekend gold trading remains considerably quieter than the traditional Monday-to-Friday market, but that could change.
Gold Perpetual CFDs allow traders to express a view while conventional gold markets are closed. As participation develops, liquidity could deepen, trading costs could fall and weekend price discovery could become more meaningful.
It remains an emerging market, but it is one to keep on the radar.
So, why trade XAUUSD?
Ultimately, the attraction seems straightforward.
XAUUSD offers movement, liquidity, competitive trading costs, extensive market access and the ability to express both long and short views.
Pepperstone's client data shows traders actively responding to those characteristics. Holding periods are short, activity increases when price movement expands, and participation runs across every major global trading region.
For longer-term traders, gold can also develop sustained directional trends and strong price persistence.
There doesn't need to be a love affair with the yellow metal to explain its popularity.
For active traders, XAUUSD simply offers many of the characteristics they want in a trading market.
The material provided here has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Whilst it is not subject to any prohibition on dealing ahead of the dissemination of investment research we will not seek to take any advantage before providing it to our clients. Pepperstone doesn’t represent that the material provided here is accurate, current or complete, and therefore shouldn’t be relied upon as such. The information, whether from a third party or not, isn’t to be considered as a recommendation; or an offer to buy or sell; or the solicitation of an offer to buy or sell any security, financial product or instrument; or to participate in any particular trading strategy. It does not take into account readers’ financial situation or investment objectives. We advise any readers of this content to seek their own advice. Without the approval of Pepperstone, reproduction or redistribution of this information isn’t permitted.