What leverage is best for trading gold?

Any leverage that comfortably covers the margin on a position sized to one to two percent risk. The setting is a constraint, not a strategy input, so higher is not better.

Does higher leverage increase my losses?

Not directly. Losses come from position size and stop distance. Higher leverage increases the maximum size you are allowed to take, which is how it indirectly increases losses.

Why did my broker reduce gold leverage before an event?

Because expected volatility rises around CPI, NFP and FOMC. Cutting leverage raises the margin requirement and reduces the broker's exposure to gaps and slippage.

How much margin does one gold lot need?

Notional value divided by the leverage ratio. At a gold price of 2,410 a 100-ounce lot is about $241,000 notional, so 1:100 needs roughly $2,410.

WHAT IS LEVERAGE ON GOLD?

Leverage on gold expresses the ratio between the notional value of a XAUUSD position and the margin a broker requires to hold it. With gold near 2,410 dollars an ounce, one standard 100-ounce lot carries a notional value of approximately 241,000 dollars, requiring about 2,410 dollars of margin at 1:100 and about 12,050 dollars at 1:20.

Leverage does not determine risk. Risk is stop distance multiplied by position size, so a trader on 1:500 who sizes to one percent of equity is taking exactly the same risk as a trader on 1:20 with the same ticket. Retail gold leverage is capped in the UK and EU, and most brokers reduce it further around CPI, non-farm payrolls and FOMC announcements when gold volatility is expected to rise.