Gold is the most precious metal and ranks amongst the most tradable commodities across the world. It has a long history of use merely as a commodity and notably as a commodity money. For centuries, gold has been used as a medium of exchange, store of value, and a unit of account, perfectly meeting all the criteria for a proper money. It has always  perceived as symbol of status, wealth and prosperity. As a commodity, and following the delink between gold and dollar in the early 1970s, gold has been used as a commodity traded globally, and was assigned a unique symbol, ‘XAU’, while traded against commodities and currencies.

‘XAU’ is a three-letter code used worldwide to symbolize gold as a commodity (in the same way other commodities (e.g., silver: XAG) or currencies (e.g., USD, EUR, etc) are codified. The symbol is primarily used by international financial markets and exchanges to identify and trade gold, very much similar to other commodities such as oil and wheat.

The XAU symbol implies the spot price of gold, or the value of contact in which gold is used as underlying (e.g., gold futures). The XAU code also appears on financial instruments such as exchange-traded funds (ETFs) whereby investors and other market participants can have exposure to, or take a position in, gold (particularly, price movement).

The code ‘XAU’ is derived from the periodic table of elements, which is a tabular order of chemical elements based on certain features: atomic number, electron configurations, and chemical properties. In the periodic table, each element is assigned a unique letter-based symbol. In this table, the symbol for gold is ‘Au’, which is originally taken from the Latin word ‘aurum’, meaning ‘shining dawn’, as the ancient used to describe gold.

The code ‘XAU’ is a combination of the symbol ‘Au’ and ‘X’ for index. This combination (X and Au) produced the abbreviation ‘XAU’ as a universal symbol for gold as a commodity in the global financial markets.