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For a linear gold contract quoted in US dollars per ounce, profit and loss depend on price movement, direction and ounces of exposure. The following method does not replace the specification for futures, options or products with different settlement formulas.
Collect the inputs
You need actual entry and exit prices, buy or sell direction, volume and the contract’s ounces per lot. Also record commission, financing and account-currency conversion. Do not infer contract size from the number of decimal places on the screen.
Convert lots before calculating
Ounces = lots × ounces per lot. With an assumed 100-ounce contract, 0.05 lot represents 5 ounces. A $1-per-ounce move then changes the position’s value by $5.
Buy P/L = (exit price − entry price) × ounces.
Sell P/L = (entry price − exit price) × ounces.
Work through both directions
A buy filled at 2,400 and closed at 2,412 on 5 ounces earns $60 before separate fees. Closing instead at 2,388 loses $60. A sell opened at 2,400 and closed at 2,390 on the same size earns $50; an exit at 2,410 loses $50. These figures are hypothetical and do not forecast prices.
Reconcile the net result
If the $60 gain uses actual executable entry and exit prices, the spread is already reflected. With $4 total commission and $2 financing charged, the result is $54 before any currency conversion or tax. Do not subtract a second estimated spread. A statement may show financing separately or include it in a total; check the labels.
Position sizing from a cash risk limit
Ignoring costs initially, ounces = cash risk budget ÷ adverse price distance per ounce. A $30 budget and a $6 stop distance suggest 5 ounces, or 0.05 lot under the assumed contract. This is an upper bound before fees, slippage and gaps, not a recommended trade. Allowing for costs reduces the size. If the minimum permitted volume exceeds your limit, do not force the trade.
A stop is an instruction, not insurance against gaps. Actual loss can exceed the planned amount. Leverage affects required margin, not the P/L formula. For a non-dollar account, first express the risk budget in the same currency as the price calculation and then reconcile the actual conversion shown on the statement.
Educational information, not a personal investment recommendation. All numerical examples are hypothetical, not live quotes. Product availability, protections and tax treatment depend on your residence and the contracting entity. Leveraged trading can cause rapid losses; a stop order does not guarantee its execution price.
Continue with the gold learning guides
- Gold trading for beginners: products, costs and risk
- What is XAUUSD? Gold quotes, ounces and contract sizes
- Gold trading costs: spread, commission and overnight financing