Leverage and position size get conflated constantly. Leverage is a margin requirement set by your broker. Position size is a risk decision you make on every trade. 1:100 leverage on gold just means you need less capital to open a given position, it says nothing about how large that position should actually be.
1. The correct calculation order
Work backward from risk, not forward from leverage: decide the dollar amount you're willing to lose on the trade (a fixed % of account equity), measure your stop-loss distance in dollars, then divide the two to get your position size. Leverage only determines whether your broker will let you open that size with the margin you have.
2. Worked example
Assume a $10,000 account, a 1% risk limit ($100), and a stop-loss 20 points ($20/oz) away from entry. Position size = $100 risk ÷ $20 per ounce = 5 ounces. On a broker quoting in standard lots (100 oz = 1 lot), that's 0.05 lots, far smaller than what 1:100 leverage would technically allow you to open.
3. Why leverage causes blowups anyway
The danger isn't leverage itself, it's using the full margin capacity leverage provides instead of sizing off risk. A trader who opens the maximum size their margin allows, rather than the size their stop-loss math calls for, is one adverse move away from a margin call regardless of what the leverage ratio says.