Xu, who won the bronze at the Beijing Olympics, quickly rebounded from being penalized for rocking the boat and opened a comfortable lead sailing on the Nothe Course on Weymouth Bay.
The medals race came down to four sailors with a chance at gold. Xu, Marit Bouwmeester of the Netherlands, Annalise Murphy of Ireland and Evi Van Acker of Belgium came into the final race separated by only one point. That meant that whoever of that group finished first would win the gold.
Xu finished nine seconds ahead of Bouwmeester, who took the silver. Van Acker took third for the bronze.
Shortly after the finish, Xu stood on her boat and waved the Chinese flag.
Murphy finished fourth and failed to win a medal after winning the first four races, including three in which she led at every mark.
Paige Railey of Clearwater, Fla., finished sixth in the medals race and eighth overall. She had no chance at a medal.
The 2008 gold medalist, Anna Tunnicliffe of Plantation, Fla., moved up to the women's match racing for these games.