The answer is that the detector .... instead of "seeing" the cumulative weight of the gold in the chain "sees" all the little links as separate targets, so to speak. Therefore teensny tinsel fine gold chains are difficult to see for ANY detector. True, there are some that see small gold better than others (like .... dedicated nugget detectors, and certain 2-filters, or whatever). But the detectors that hone in on that stuff, are usually not the power-house for depth, silver, etc... There's trade-offs between machines. So on the one hand, the XS is a great coin and relic hunter (depth, speed, TID, etc...) but on the other hand, no it won't get teensy thin chains or teeny platinunum earing studs, etc... But if you have a machine, like a beach pulse for instance, that excells in finding those things, believe me the XS will "kick it's b*tt in plenty of other arenas.
If you wad up the gold chain tightly (which is entirely possible to find like this when a chain has been tumbling around in the surf for years), then you will get a better signal off of it, verses if the chain is laid out length-wise.
Here's a little something to think about, that anyone can test for themselves: Take the ring portion of a round pull tab. Test it on your detector and make note of the TID you get (about nickel or whatever ..... mid to high 20s on the Whites scale, for instance). Now snip the pull-tab ring so that it's no longer a complete circle, and the snipped ends aren't touching each other. Now air-test the broken pulltab and you will notice that the TID will drop (to the low 20s or teens or whatever). Notice though that the amount of aluminum has not changed before or after you snipped the tab! It's still exactly the same weight of aluminum. So too does this example hold up for gold: The amount of gold weight in a solid round ring might be the exact same weight of gold in a chain made of many separate links. But each will give a different kind of reading.
BTW, the XS can pick up gold chains. Just not tinsel thin ones. You can still get beefier gold bracelets, chains, etc... But if you are hunting an area where you suspect tinsel thin gold chains (beaches), you might want to consider having a second machine that sees them better. But those machines will come with their drawbacks, so there's a lot to consider.