Gold price calculation formula and application

Gold price calculation formula and application

As an important precious metal, gold has always attracted much attention.Its price fluctuations have an important impact on the global economy and investment markets.Among investors and analysts, the formula for calculating the price of gold is a basic knowledge point.This article will be introduced in detail about the calculation formula and its applications of gold prices.

Basic concept of gold price

Before understanding how to calculate the price of gold, we first need to understand a few basic concepts:

-Cim Gold's current cargo price: The market price of real -time transactions on the day is also known as the future price.

-Side contract: Refers to the delivery or settlement of the buyer and seller agreed to be settled or settled in accordance with the conditions determined in advance in the future.

-Chefour premium/discount: refers to the additional costs or income generated when there are differences between futures contracts and the spot market.

Common influential factors

There are many factors affecting gold price fluctuations, mainly including:

-In international political situation: incidents such as geopolitical tension, conflict between war, and other incidents will lead to heating risk aversion and pushing up gold demand and price.

-Economic data: Economic data such as inflation and unemployment rates have an important impact on determining investor confidence and risk preferences.

-D. dollar exchange rate: The US dollar trend is negatively related to gold. When the US dollar stronger, the price of gold is usually lowered.

Common calculation method

According to different needs and situations, the following methods can be used to calculate the forecast or determine the current gold price:

Spot+interest = long -term/options

Cash-And-Carry model

PVGO model (Present Value of Gold Output)

Gordon Growth Model (GGM)

RISK-Adjusted Return on Capital (RAROC) model

Example analysis and application cases

*For example, we analyze through the Cash-And-Carry model:

*The setting target date is December 31st, and the US Federal Reserve Bank interest rate is 2%. At present, the spot silver is priced at the price of dollars per ounce. Under the same conditions, remote silver is priced at the price of dollars per ounce.



*It can be drawn through the Cash-And-CARRY model:

(-)/ = 5%

(1+2%)/(1+5%) -1 = -6.9%

*This means that the use of this model arbitrage has a greater opportunity.

"Summary"

This article explores from theoretical to practice how to predict and obtain the future or current silver market performance in different ways, and give specific cases to explain.

Hope to be inspired by readers!