Educational content. This article explains why local gold prices in countries such as Vietnam, Indonesia and India differ from the international spot price. It does not constitute investment advice or a recommendation. CFD trading carries significant risk of loss and may not be suitable for all investors.
Domestic gold prices differ from the international price because the local price is not the spot price in a different currency. It is the spot price converted into a local unit and currency, then increased by import duty, tax, supply limits and the dealer's margin. The result is a premium, often a few percent and sometimes much more.
This article builds that price layer by layer, with numbers from our feed and clearly labelled illustrative rates. Nothing here is a forecast.
What Is the International Gold Price That Domestic Prices Are Compared With?
The international gold price is the spot price of one troy ounce of gold in US dollars, quoted as XAUUSD. One troy ounce is 31.1035 grams. Spot gold is a wholesale reference for large bars traded between dealers, not a price at which a retail buyer can walk into a shop. How spot differs from futures is covered in what is spot vs futures gold.
Local sellers start from this reference and add their own costs. The comparison is therefore always "local retail price versus converted spot price". A premium exists only when that comparison, after unit and currency conversion, still shows a gap.
How Do You Convert the International Price Into a Local Unit?
Convert in two steps: ounce to the local weight unit, then dollars to the local currency. The formula is:
Converted price = XAUUSD / 31.1035 x local unit in grams x USD/local currency rate
The table uses the Vanto feed snapshot of 10 October 2026, where XAUUSD was quoted at 4,194.38 (bid). The Japanese yen and Singapore dollar columns use the live USDJPY (158.282) and USDSGD (1.280323) from the same snapshot.
| Unit | Weight | USD | JPY | SGD |
|---|---|---|---|---|
| Troy ounce | 31.1035 g | 4,194.38 | 663,900 | 5,370 |
| 1 gram | 1 g | 134.85 | 21,345 | 172.65 |
| 10 grams (common in India) | 10 g | 1,348.52 | 213,447 | 1,726.55 |
| Vietnamese tael (luong) | 37.5 g | 5,056.96 | 800,426 | 6,474.55 |
Source: Vanto feed snapshot, 10 October 2026. Yen and Singapore dollar values are computed from the feed's own USDJPY and USDSGD quotes. The ounce row in yen and Singapore dollars is rounded.
Two details matter here. First, local units differ: India quotes per 10 grams, Vietnam per tael of 37.5 grams, and Indonesian dealers per gram. A price that looks "much higher" per tael may simply be a bigger unit. Second, conversion changes the number but not the value. The effect of the exchange rate alone is explained in why gold priced in dollars affects other currencies.
Does Purity Change the Price?
Yes, purity scales the price linearly. The international price refers to gold of 99.5% fineness or better (the good delivery standard for large bars). A local product sold as 99.99% or as 22 carat jewellery has a different gold content per gram.
A 22 carat item is 22 parts gold out of 24, or 91.67% gold. Its pure gold content per gram is 0.9167 of the 24 carat figure. Comparing a 22 carat jewellery price with the 24 carat converted spot price therefore overstates the gap before any premium exists. Always compare like with like: bar with bar, and the same fineness.
Why Do Import Duties and Taxes Create a Premium?
A country that taxes gold at the border makes imported gold dearer than the world price, so the local price rises to match the cost of bringing metal in. The mechanism is arithmetic. A dealer who imports a bar pays the international price plus duty, so the dealer cannot sell for the converted spot price and stay in business. Arbitrage then holds the local price near that import-parity level: if it rose far above it, importers would bring in more gold, and if it fell below it, imports would stop.
India is the standard example. Its import duty on gold is set by government notification and has been changed more than once in recent years. Because the rate is a policy decision, this article does not state the current one. Check the current customs notification before using any rate in a calculation.
The structure is stable even when the rate changes. The duty applies to the converted price, and a goods-and-services tax of 3% is then charged on the duty-paid value, not on the base price. The table shows the stacking with illustrative duty rates and an illustrative exchange rate of 88 INR per USD. Neither is a live or official figure.
| Illustrative duty | Converted price, 10 g | Price after duty | 3% tax on duty-paid value | Total | Increase over base |
|---|---|---|---|---|---|
| 0% | INR 118,670 | INR 118,670 | INR 3,560 | INR 122,230 | 3.00% |
| 6% | INR 118,670 | INR 125,790 | INR 3,774 | INR 129,564 | 9.18% |
| 15% | INR 118,670 | INR 136,471 | INR 4,094 | INR 140,565 | 18.45% |
Base: Vanto feed snapshot, 10 October 2026, XAUUSD 4,194.38 converted to 10 g at 88 INR per USD (illustrative rate).
The worked arithmetic for the 15% row: 1,348.52 USD per 10 g x 88 = 118,670 INR. Duty: 118,670 x 1.15 = 136,471 INR. Tax: 136,471 x 0.03 = 4,094 INR. Total: 140,565 INR, which is 18.45% above the base. The tax compounds on the duty, so a duty of 15% plus a tax of 3% is not 18% in total.
Indonesia adds a different feature: income-tax withholding (PPh 22) on some gold bullion transactions, with rates and thresholds set by regulation (Ministry of Finance Regulation PMK 51/2025 took effect on 1 August 2025). Because such rules change, this article does not state rates. The lasting consequence is a spread between the dealer's selling price and the dealer's buyback price, which exists in every retail gold market.
Why Can a Supply Limit Create a Premium Even Without Duty?
When local supply is restricted, the local price can exceed import parity, because arbitrage cannot close the gap. Vietnam is the clearest case. Under Decree 24/2012, the State held a monopoly on gold bar production, which the State Bank of Vietnam managed, and the SJC brand was designated as the state bar. Supply of the main domestic bar therefore depended on the central bank rather than on how much gold importers could bring in. Decree 232/2025 of 26 August 2025 ended that monopoly: bar production is now a conditional business that eligible companies and banks can be licensed to carry out by the State Bank. This article does not state how the premium looks after that change, so check a current source.
The size of the gap has varied widely. VnEconomy reported on 5 June 2024 that SJC bars stood about VND 4.98 million per tael above the world price, down from a peak gap of about VND 20 million. On 3 June 2024 the State Bank had authorised four state-owned banks (Agribank, Vietcombank, Vietinbank and BIDV) and SJC to buy bars from it and sell them to the public, with the stated aim of narrowing the gap (reported by VTV, 3 June 2024).
The figure matters less than the cause: when arbitrage is blocked, price is set by local supply and demand, not by import cost.
How Does a Premium Look in Dollars?
A premium is a percentage of the converted price, so on one Vietnamese tael it scales with the spot price. Using the feed snapshot, one tael (37.5 g) converts to 5,056.96 USD.
| Premium over converted spot | Extra cost per tael (USD) | Price per tael (USD) | Extra cost at 26,000 VND per USD (illustrative) |
|---|---|---|---|
| 0% | 0.00 | 5,056.96 | 0 |
| 2% | 101.14 | 5,158.10 | VND 2.63 million |
| 5% | 252.85 | 5,309.81 | VND 6.57 million |
| 10% | 505.70 | 5,562.66 | VND 13.15 million |
Source: Vanto feed snapshot, 10 October 2026. The VND rate is illustrative and not a live quote.
Arithmetic for the 5% row: 5,056.96 x 0.05 = 252.85 USD. At 26,000 VND per USD, that is 6.57 million VND. A premium measured as a percentage therefore moves in the same direction as spot, while a premium measured in local currency also moves with the exchange rate.
Does the Premium Stay Constant When Spot Moves?
No. A premium can be a fixed percentage, a fixed local amount, or a mix, and the three behave differently. Duty and tax are percentages, so they grow with the converted price. A dealer's fixed fee does not. A supply-driven premium follows local demand and can widen when spot falls, as buyers rush to buy a "cheap" local price while supply stays limited.
This is why a domestic price can rise on a day when the international price falls. The local price reacts to the exchange rate, the tax rate and local supply, not only to XAUUSD. For example, a weaker rupee raises the converted price even when XAUUSD is unchanged.
What Do the Three Markets Have in Common and Where Do They Differ?
All three add costs on top of the converted spot price, but the main driver differs. The summary below compares the mechanisms, not the current numbers.
| Driver | Vietnam | Indonesia | India |
|---|---|---|---|
| Main source of the gap | State control of bar supply (Decree 24/2012, monopoly ended by Decree 232/2025) | Tax at purchase and resale, dealer buy-sell spread | Import duty and 3% tax on the duty-paid value |
| Typical unit | Tael of 37.5 g | Gram | 10 grams |
| What can close the gap | Licensing and supply decisions by the State Bank | Tax rules and dealer spread | A change in the duty rate |
| What can widen it | Limited supply, strong local demand | Higher transaction taxes | A higher duty rate, a weaker rupee |
The same logic applies in Japan, where the retail price quoted by a precious metals dealer includes the dealer's margin and consumption tax. The usual retail pattern, a selling price above and a buyback price below the converted spot, appears in every country.
When Does the Comparison Break Down?
The comparison fails whenever the two numbers are not measured at the same moment, in the same unit, at the same fineness and at the same stage of the supply chain. Five cases cause most false "premiums".
- Different timing. Local dealers publish prices once or a few times a day, while XAUUSD ticks continuously. A local price set in the morning compared with an evening spot shows a gap that is only the intraday move.
- Different fineness. A 22 carat price compared with a 24 carat spot overstates the gap by 8.33% before any premium.
- Different product. Wholesale bars, retail coins and jewellery carry different margins and making charges.
- Different side of the price. Comparing a dealer's selling price with the spot bid overstates the cost. The dealer's buyback price is the relevant one when you consider selling.
- Different exchange rate. A dealer may convert at its own internal rate, not the interbank rate.
Common Mistakes When Comparing Domestic and International Gold
- Treating the whole gap as "profit". The gap pays for duty, tax, storage, insurance, dealer margin and the buyback spread. It is not a free difference.
- Ignoring the buyback side. A buyer pays the selling price but, when selling back, receives the lower buyback price. The round trip costs the spread before any price move.
- Using one percentage for all products. The premium on a bar is not the premium on jewellery.
- Assuming a premium is permanent. Duty rates and supply policies are changed by governments, so a premium that exists today can narrow or widen.
- Reading a premium as a signal about the international price. A wider local premium says something about local rules and demand, not about where XAUUSD will go.
What Does This Mean for a CFD Trader on XAUUSD?
A gold CFD tracks the international spot price, so the domestic premium never enters its profit or loss. If a Vietnamese dealer's price rises because of a supply limit while XAUUSD stays at 4,194.38, an XAUUSD position is unchanged. The reverse is equally true: a duty cut that lowers the local price does not change the CFD.
In the Vanto feed, XAUUSD has a contract size of 100, which means 1 lot controls 100 troy ounces, or 3,110.35 grams. At the snapshot price, the notional value of 1 lot is 4,194.38 x 100 = 419,438 USD. With leverage of 1:500 on metals, the margin for that position is 419,438 / 500 = 838.88 USD. Leverage amplifies losses as well as gains: a 1 USD move in XAUUSD is 100 USD on 1 lot, whichever direction it takes. The margin call level is 100% and the stop-out level is 50%, as described in what is a stop-out level in trading.
A CFD is not physical gold. It gives no ownership of metal and carries financing charges, explained in what is swap in trading. The pattern of the swap, such as the triple day falling on Wednesday for XAUUSD, is a structural fact, and the rates change. The mechanics of position size are covered in what is a lot and what is contract size in trading. For a broader introduction, read how do you trade gold.
Frequently Asked Questions
Why is gold more expensive in my country than the international price?
Because the local price adds import duty, tax, dealer margin and sometimes a supply limit to the converted spot price. Part of the gap can also be a difference in unit or fineness, which is not a real premium.
Is a domestic premium an arbitrage opportunity?
Not for most people. A real arbitrage requires importing or exporting metal, and duty, tax, transport, insurance and legal limits usually absorb the gap. Where supply is restricted, as Vietnamese bar production was under the pre-2025 state monopoly, private import may not be permitted at all.
Why does domestic gold sometimes rise when the international price falls?
Because the local price also depends on the exchange rate, local taxes and local demand. A weaker local currency raises the converted price even when XAUUSD is flat or lower.
Does a domestic premium affect my XAUUSD CFD?
No. An XAUUSD CFD follows the international spot price quoted in US dollars. The local premium affects only the price of physical gold bought from a local dealer.
How do I calculate the premium on a local gold price?
Convert the local price to USD per troy ounce, adjusting for unit and fineness, then compare it with XAUUSD. The premium is (local converted price / XAUUSD) minus 1, expressed as a percentage, and it should be measured at the same moment.
Are the duty and tax rates in this article current?
No. The duty rates in the table are illustrative, because rates are set by governments and change. Use the current official notification for any real calculation.
Calculate the Numbers for Your Own Position
Use the Vanto trading calculator to see the contract size, margin and profit per price move for XAUUSD before you open a position. Leverage amplifies losses as well as gains, so check the figures at the lot size you plan to use.
Risk warning. Trading securities, futures, options, and contracts for differences are complex financial instruments that require knowledge and understanding. Prices can fluctuate significantly and securities may become valueless. Investors may incur losses exceeding the potential for profits. Trading on margin can result in losses greater than the amount initially deposited. Past performance is not necessarily a guide to future performance. The information in this article is for educational purposes only and does not constitute investment advice, a recommendation, or an offer to buy or sell any financial instrument. Consider whether CFD trading is appropriate for your circumstances and seek independent advice if necessary.