Why the Singapore dollar matters when you buy gold

Gold is priced in US dollars per ounce, everywhere

The big gold markets, London and New York among them, quote gold in US dollars per troy ounce. A troy ounce is 31.1035 grams, a little heavier than the ounce on a bag of flour. When the news says gold went up or down today, it nearly always means that US dollar figure.

Dealers everywhere start from the same number. A shop in Zurich, Dubai or Singapore converts it into its own currency, then adds a premium for the particular bar or coin. The world price is shared. What each buyer actually pays depends partly on the currency in their wallet.

For anyone in Singapore, then, the USD/SGD rate is quietly part of the gold price, whether you think about it or not.

How a US dollar gold price becomes a Singapore dollar price

The conversion is plain multiplication. Take the US dollar price per ounce and multiply it by the number of Singapore dollars one US dollar buys. That gives you the price per ounce in Singapore dollars. Divide by 31.1035 for the price per gram.

You don't have to do this yourself. Our prices follow the live world spot price through the day and are shown in Singapore dollars, with the premium for each product listed openly on its product page. The conversion is already built in. Knowing it's there simply explains movements that would otherwise look strange.

Over the weekend the world market is closed, so nothing moves. We sell at the last closing price until trading starts again.

A worked example: same gold price, different exchange rate

To keep this clear we'll use percentages rather than dollar figures, since real prices and rates change by the hour. Live numbers are on our market page.

Picture one ounce of gold with a certain price in Singapore dollars before any premium. Now freeze the US dollar gold price exactly where it is, and move only the exchange rate. Then try the opposite.

• If the US dollar strengthens 5% against the Singapore dollar, that ounce costs you about 5% more. Gold in US dollars did nothing.
• If the US dollar weakens 4% against ours, the ounce costs about 4% less. Again, gold in US dollars didn't move.
• If the exchange rate stays put and gold rises 10% in US dollars, your price rises 10% too. This is the case most people picture.

When gold and the currency move together or against each other

Most days both numbers shift at once, which is why the local price can behave differently from the headline. Sometimes the moves stack. If gold rises in US dollars and the US dollar also strengthens against ours, the Singapore price climbs by more than the news suggests.

Other times they cancel. Say gold rises 5% in US dollars in a week, while the US dollar weakens by about 5% against the Singapore dollar. The two roughly offset, and the Singapore price ends the week almost where it began. The headline says gold had a strong week. Your price per gram barely changed.

This is the commonest reason customers tell us our site doesn't match what they read. Neither is wrong. One is counted in US dollars, the other in Singapore dollars.

Why US and Singapore gold charts can look different

Put a US dollar gold chart next to a Singapore dollar one for the same period and the shapes are usually close, but not identical. Over a few days the gap is small. Over months or years, currency moves can pull the two lines noticeably apart.

The Monetary Authority of Singapore runs monetary policy by managing the Singapore dollar against a basket of trading partners' currencies, rather than by setting an interest rate in the usual way. The Singapore dollar has often moved more gently than many other currencies as a result. Gently still means it moves, and even small shifts show up in the price per gram.

For a buyer here, the Singapore dollar chart is the one that matches what you pay and what you would get back. That's why our market page shows prices and charts in Singapore dollars. What drives the US dollar gold price itself, such as interest rates and demand, is a separate subject with its own guide.

The same arithmetic applies when you sell

Currency cuts both ways. When you sell gold back, the amount starts from the world price converted into Singapore dollars at that moment. If the US dollar has strengthened since you bought, the conversion works in your favour. If it has weakened, it works against you, even with gold in US dollars unchanged.

When you sell to us, the final amount is set at the counter after testing, at that moment's price. Bring the bar or coin, plus any certificate or receipt you still have, and our staff will test it before confirming the figure. The gap between buying and selling prices is a different matter, covered in our guide to the spread.

None of this says when to buy or sell. That's your call. It just means that when you look back at what you paid, compare in Singapore dollars, because that's the money you spent and the money you'd receive.