In the context of trading gold, a pip refers to the smallest incremental movement in the price of gold. Unlike forex trading, gold is not quoted with four or two decimal places. Instead, gold is typically quoted in dollars and cents per ounce.
The pip value for gold depends on the decimal precision used by your broker. Most commonly, gold is quoted with two decimal places. For example, if the price of gold moves from $1,250.00 to $1,250.01, that would be a one-pip movement.
The monetary value of a pip in gold depends on the contract size or lot size being traded. The standard lot size for gold is 100 troy ounces. Therefore, the value of a one-pip movement in gold would be calculated based on the lot size and the current price of gold. For instance, if the price of gold is $1,250 per ounce, a one-pip movement in a standard lot would be equivalent to $1.
It’s worth noting that the pip value may vary depending on the specific contract size and the price precision used by your broker. Different brokers may have slightly different pip values for gold, so it’s advisable to consult your broker’s specifications or contact their customer support for precise information on pip values for gold trading.