Current gold price drop; cost of gold gram in Kazakhstan inquired.
Gold prices can vary significantly across the world due to market structure, local conditions, and regional economic factors. Let's take a look at how the price of gold fared in key locations on October 4 and 5.
After the evening interbank London gold fixing on October 4, the price of a troy ounce was $1,754.55, down 0.21%. As the center of the global over-the-counter (OTC) gold market, London serves as the primary benchmark for market participants due to the London Bullion Market Association's twice-daily "London Fix" gold price, which is recognized worldwide for pricing gold[1].
On October 5, the price of gold in New York (COMEX) was $1,761.2, down 0.18%. Operating a major futures market, New York is where gold contracts are often traded, representing short-term speculative and hedging activity. Prices here can include futures premiums and reflect US dollar liquidity and interest rate expectations[4].
Interestingly, as of October 5, in Kazakhstan, the price of 1 gram of gold was 24,144 tenge (-28%), an ounce was 750,952 tenge, and a kilogram was 24,143,657 tenge. Gold bars in Kazakhstan can serve as a reliable investment tool, with Kazakhs purchasing over 113.7 kg of minted bars from banks in August 2021, the most popular weight among buyers being 10g. The National Bank launched a program for the sale and redemption of minted gold bars for the public in 2017, with a total of 2.3 tons have been sold since its inception[2].
The US dollar’s strength significantly affects gold prices in New York since gold is primarily priced in USD globally[3][5]. On the other hand, London's prices can be influenced by UK economic conditions and the Bank of England’s gold holdings and policy stance, as the UK holds around 310 tonnes of gold largely managed by the Bank of England[1]. Kazakhstan's local gold price can diverge due to the tenge’s exchange rate, local inflation, taxation, and export controls[5].
In essence, while the global gold price benchmark set mainly in London and futures pricing in New York provide a base, local economic factors, currency exchange rates, dealer premiums, taxes, and regional supply-demand conditions cause the price differences observed in Kazakhstan relative to these major centers.
[1] London Gold Benchmark: https://www.lbma.org.uk/gold[2] Kazakhstan Gold: https://baiterek.gov.kz/baiterek-market/[3] Gold and the Dollar: https://www.investopedia.com/terms/g/gold-dollar-correlation.asp[4] Gold vs. COMEX: https://www.investopedia.com/terms/l/Comex.asp[5] Gold Pricing and the USD: https://www.cmegroup.com/trading/metals/gold-market-information.html
- The price of gold in New York, serving as a major futures market for short-term speculative and hedging activity, was affected by the US dollar’s strength, as gold is primarily priced in USD globally.
- In Kazakhstan, the local gold price could diverge due to the tenge’s exchange rate, local inflation, taxation, and export controls, making gold bars a reliable investment tool for Kazakhs.
