The pricing standard of Gold Transaction Index PriceFriends who care about the gold market and are interested in buying and selling gold must first understand “how exactly is the price of gold set?” It is simple to sustain significant losses if you trade idly without understanding the rules. High security is a significant benefit of gold ownership. You will no longer benefit from trading gold if you lose money. As a result, we must practice special caution. Because gold trading takes place on a global scale, its price can change at any time, every day. Gold is still traded in the Swiss, London, and New York trading markets after the Malaysian market closes. The London and New York markets are the two most significant markets when it comes to international gold trading. The well-known gold spot trading hub among them is London Market. The London Precious Metals Exchange Association’s (LBMA’s) gold price, which serves as the benchmark price for gold trading, is derived from the order of gold, which is recorded using a digital system. The transaction price per troy ounce (*Note 1) on the global market can be ascertained using this pricing mechanism. Note 1: The troy ounce (ozt), or 31.1035 grams, is the standard trading unit for gold on the European and American markets.
Focus on exchange ratesAlthough gold trading prices are thought to be stable in comparison to other financial products, exchange rate fluctuations do occur frequently. Never overlook the importance of monitoring the exchange rate when trading gold in Malaysia. Dollars are the unit of currency used for the gold market on a global scale. Consider the following scenario: “US$1,200 per troy ounce of gold.” It is more advantageous to purchase gold when the Ringgit Malaysia appreciates because we are paying in that currency. Conversely, when the Ringgit Malaysia weakens, it is more profitable to “sell gold.”
Under the above assumptions, there are the following situations:
Situation 1 [ USD 1 = RM4 ]
At USD1,200 per troy ounce, the Ringgit Malaysia required to buy 1 ounce of gold is RM4,800.
Situation 2 [ USD 1 = RM4.50 ]
At USD1,200 per troy ounce, the Ringgit Malaysia required to buy 1 ounce of gold is RM5,400.
Situation 3 [ USD 1 = RM5.50 ]
At USD1,200 per troy ounce, the Ringgit Malaysia required to buy 1 ounce of gold is RM6,600.
Exchange rate fluctuations will be to blame for the aforementioned spread even if the price of gold globally remains constant. However, it is important to consider the fluctuation of the gold price along with the exchange rate. The balance between the two is needed to determine whether it is time to buy or sell after careful consideration.
Price benchmark for 1kg gold in year 2020The question “How much is the price of 1 kg of gold now in 2020?” can be answered once you have a basic understanding of the methodology used to determine gold prices. First, we must change the price of 1 ounce of gold in the international market to the price of 1 gram of gold. The weight of one ounce is roughly 31.1035 grams. The cost of one gram of gold in dollars is calculated by multiplying the market price of gold by 31.1035. The price of one kilogram of gold can be calculated by multiplying the amount by the current market price, by 1,000, and by converting one gram to one kilogram. According to information provided by the Bank of Taiwan, the price per troy ounce in September 2020 will be roughly US$1962.69 at that time.
The average exchange rate is 1 US dollar to 29.2210 Taiwan dollars.
Use these two numbers for calculations,
It can be seen that the price of 1 kg of gold is about 1.84 million Taiwan dollars.
However, there is a handling fee for gold trading, so this price is not equal to the actual buying and selling price.
The aforementioned price is only used as the benchmark price for 1 kg of gold trading.