Understanding Gold Prices: The Dollar vs. Yen Perspective on Precious Metals

Gold and other precious metals have garnered significant attention recently due to various political, economic, and social factors. In this article, we will examine gold prices from the perspective of a prominent superfund that has monitored the precious metals market since the early 2000s.

What Exactly are Gold Prices?

When people refer to gold prices, what figures come to mind?

- Is it the price of gold bars, such as 1 kg priced at 16 million yen?
- Or is it 16,000 yen per gram?
- Perhaps it’s the ounce price reported in the news, like 3,200 dollars?

The perspective of gold pricing varies significantly between ‘‘yen’’ and ‘‘dollar’’ calculations. This distinction may seem trivial, but it’s crucial; Japanese investors predominantly look at prices in yen, while the global market typically references prices in USD.

Yen vs. Dollar: Price Trends Over the Past Five Years

Let's delve into the trend of gold prices between January 2019 and April 2025, comparing both yen and dollar values.
According to data prepared by Superfund Japan, the blue line indicates that gold prices in dollars hover around 2,000 dollars, which translates to approximately 8,400 yen per gram.

- Dollar pricing: Approximately 2,000 dollars per ounce.
- Yen pricing: Approximately 8,400 yen per gram.

A critical observation is that since early 2022, yen-denominated gold prices have reached new highs in Japan, while globally, dollar prices have only recently begun to increase again in Spring 2024. This indicates that the increase in gold prices in Japan can primarily be attributed to currency fluctuations.

Revisiting Gold Pricing Calculations

Typically, gold prices are displayed based on a standard ounce measurement, equivalent to about 31.1035 grams.
For example:

- If 1 ounce equals 3,000 dollars, then:

- 3,000 dollars ÷ 31.1035 grams ≈ 96.45 dollars per gram.

- With the exchange rate at 1 USD = 150 yen:

- 96.45 dollars × 150 yen ≈ 14,467 yen per gram.

- Including a sales tax of 10%, the retail price would be about 15,914 yen per gram.

Now, let’s consider what happens if gold reaches 5,000 dollars per ounce:

- 5,000 dollars ÷ 31.1035 grams ≈ 160.75 dollars per gram.
- If the exchange rate remains at 1 USD = 150 yen:

- 160.75 dollars × 150 yen ≈ 24,112 yen per gram (after tax: 26,523 yen per gram).

- If the exchange rate changes to 1 USD = 120 yen:

- 160.75 dollars × 120 yen ≈ 19,290 yen per gram (after tax: 21,219 yen per gram).

These calculations illustrate the dual influence of ‘‘dollar pricing’’ and ‘‘exchange rates’’ on gold price fluctuations.

Gold as a Long-Term Asset

Precious metals, including gold, generally have a lower correlation with other asset classes. Integrating gold into an investment portfolio can heighten overall portfolio stability. Recently, various investment methods encompassing commodities have emerged, leading to a renewed appreciation for gold as a long-term asset preservation strategy.
This moment may serve as a pivotal opportunity for individuals to contemplate incorporating gold into their asset formation strategies.

About Superfund

Established in 1995 in Vienna, Austria, Superfund is a fund provider utilizing a fully automated trading system. With nearly 30 years of operational experience, the firm has expanded across major cities in Europe, America, and Asia, receiving over 70 prestigious awards including accolades from ‘The Wall Street Journal’ and ‘Barclay Hedge’.
After opening an office in Tokyo in 2005, Superfund Japan began its operations in 2006.

Unique Investment Strategies

Superfund offers unique investment strategies developed from a proprietary fully automated trading system.

Focus on Precious Metals

Since the early 2000s, Christian Bach, the founder and owner, has focused on gold and other precious metals, recommending diversified investments in precious metals as hedging strategies against economic uncertainty, particularly during crises and inflationary periods.

Contact Information

Company Name: Superfund Japan K.K.
Financial Instruments Business Operator: Kanto Financial Bureau Long No. 98
Associations: Japan Securities Dealers Association, Japan Investor Protection Fund
Headquarters Address: 2-9-1 Toranomon, Minato-ku, Tokyo, 11th Floor, Toranomon Hills Edo Misaka Terrace
Phone: 03-3508-6700 (Representative) Mon-Fri 9:00-17:00
Email: tokyo@superfund.jp
Website: superfund.co.jp

This material was created by Superfund Japan K.K. and is not a legally mandated disclosure document under the Financial Instruments and Exchange Act. While the information is compiled from reliable sources, the accuracy and completeness are not guaranteed, nor are future operational results or market conditions. The company assumes no responsibility for any damages arising from the use of the information provided herein. Please ensure to review the investment trust explanatory documents carefully before purchasing financial products.