Live Commodity Market

How to Calculate Commodity Price in Your Own Currency

To calculate the price of a commodity (like gold, oil, or agricultural products) in your own currency, you need to follow a few steps. Here’s a simplified process:

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Get the Commodity Price

First, find the commodity’s current market price. This can typically be found in major commodity exchanges like the New York Mercantile Exchange (NYMEX), London Metal Exchange (LME), or Multi Commodity Exchange of India (MCX). Commodity prices are usually quoted in a major global currency like USD (U.S. Dollars).

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Find the Exchange Rate

Since commodities are often priced in USD, you need to know the exchange rate between USD and your local currency (for example, INR for India). You can easily find live exchange rates from reliable financial websites or tools like XE.com, Google Finance, or Currency Converter apps.

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Convert the Price to Your Local Currency

Use the exchange rate to convert the commodity price into your own currency using this formula:

Commodity Price in Local Currency=Commodity Price in USD×Exchange Rate\text{Commodity Price in Local Currency} = \text{Commodity Price in USD} \times \text{Exchange Rate}

Commodity Price in Local Currency=Commodity Price in USD×Exchange Rate

For example, if the price of gold is $1,800 per ounce and the USD/INR exchange rate is ₹75, then:

Gold Price in INR=1,800×75=₹135,000 per ounce\text{Gold Price in INR} = 1,800 \times 75 = ₹135,000 \text{ per ounce}

Gold Price in INR=1,800×75=₹135,000 per ounce

Formula to Convert Ounces to Grams and Calculate Commodity Price:

Commodity Price per Gram=(Commodity Price per OunceOunces to Grams Conversion Factor)×Exchange Rate\text{Commodity Price per Gram} = \left( \frac{\text{Commodity Price per Ounce}}{\text{Ounces to Grams Conversion Factor}} \right) \times \text{Exchange Rate}Commodity Price per Gram=(Ounces to Grams Conversion FactorCommodity Price per Ounce)×Exchange Rate

Where:

• Commodity Price per Ounce: Price of the commodity (e.g., gold, silver) in USD or any other major currency.
• Ounces to Grams Conversion Factor: 1 ounce is equal to 28.3495 grams.
• Exchange Rate: The conversion rate from USD (or another currency) to your local currency.

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Example:

Let’s assume you want to calculate the price of gold per gram in Indian Rupees (INR), and you have the following data:

• Price of Gold per Ounce: $1,800
• Exchange Rate (USD to INR): ₹75

Step-by-Step Calculation:

1. Convert Ounces to Grams:
   Since 1 ounce = 28.3495 grams, use this as the conversion factor.

   Price per Gram in USD=1,80028.3495≈63.48 USD per gram\text{Price per Gram in USD} = \frac{1,800}{28.3495} \approx 63.48 \text{ USD per gram}Price per Gram in USD=28.34951,800≈63.48 USD per gram

2. Convert to Your Currency (INR):
   Now, multiply the price per gram in USD by the exchange rate (₹75).

   Price per Gram in INR=63.48×75=₹4,761 per gram\text{Price per Gram in INR} = 63.48 \times 75 = ₹4,761 \text{ per gram}Price per Gram in INR=63.48×75=₹4,761 per gram

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Final Result:

The price of gold per gram in INR is ₹4,761 based on the current gold price of $1,800 per ounce and an exchange rate of ₹75.

Consider Additional Costs

Depending on the commodity, there could be additional costs like import duties, transportation fees, and taxes. Make sure to account for these to get the actual price in your local market.

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