What You Will Learn in This Lesson
In this lesson you will learn exactly what an ounce, or more precisely a troy ounce, is; why the entire global gold market quotes its price in that unit and in US dollars; and how that single global number, once it is combined with Iran's dollar rate, builds the toman price of every gram of gold and every coin in the domestic market. The previous lesson, "A Map of Global Markets," showed why news about global indices reaches Iran's market; this lesson follows that same path for one specific commodity, gold, step by step.
Definitions
What an Ounce Is
When wire services write that "gold passed such-and-such dollars an ounce," they do not mean the everyday ounce used in Western household weighing. Gold, silver, platinum and palladium are measured in a unit called the troy ounce, equal to 31.1035 grams. That figure differs from the ordinary (avoirdupois) ounce, close to 28.35 grams, used to weigh things like groceries; the troy ounce is about 9 grams heavier. Confusing the two units, even in a back-of-envelope calculation, throws the answer off by several percent.
The name "troy" traces back to the French market town of Troyes, where European merchants weighed precious metals in this unit as early as the Middle Ages. Centuries later the same standard reached the metals markets of London and New York, and today it is the official unit for pricing gold and the other precious metals worldwide.
Why Gold Is Priced in Dollars
The benchmark for the global gold price, shown under the symbol XAU/USD, is set in auctions held in London, and every other market in the world, including Iran's domestic market, takes that same number as its reference. That means regardless of whether a trade happens in Tehran or New York, everyone starts from one base figure in dollars per troy ounce; the differences appear only afterward, when that figure is converted into local currency.
The Mechanism: From the Global Ounce to the Toman
The chain that converts the global gold price into a domestic price can be seen in four simple steps:
- Step 1: The global market quotes the price of one troy ounce of pure gold in dollars.
- Step 2: That figure is divided by 31.1035 to get the price of one gram of pure (24 karat) gold in dollars.
- Step 3: The dollar price per gram is multiplied by Iran's domestic dollar rate to build the toman price of one gram of 24 karat gold.
- Step 4: For the gold most commonly traded in Iran's market, 18 karat, that figure is multiplied by the karat factor, 0.75.
Suppose the global ounce is 4,200 dollars. First we divide it by 31.1035 to reach close to 135 dollars per gram of pure gold. Now suppose Iran's dollar rate is 180,000 toman; that figure is multiplied by 180,000 toman to reach close to 24,300,000 toman per gram of 24 karat gold. For 18 karat gold, that same figure is multiplied by 0.75 to reach close to 18,200,000 toman. Both numbers here, the 4,200 dollar ounce and the 180,000 toman rate, are purely hypothetical, chosen only to show the mechanism, not today's price.
Here is the key point: this chain has two independent variables, the global ounce in dollars and Iran's dollar rate. Either one, on its own, can move the final toman price of gold even if the other stays flat. The fuller formula, which also accounts for the making charge and the premium the retail market adds or subtracts, is explained in the lesson "Pricing Gold in Iran: From the Global Ounce to the Number on Your Jeweller's Invoice"; this lesson focuses only on those first two links, the ounce and the dollar.
A Worked Example: When the Two Numbers Do Not Move Together
Suppose the global gold ounce rises 5 percent over a week while Iran's free-market dollar rate stays flat over that same week. Because the domestic dollar rate did not change, the toman price of gold rises by roughly that same 5 percent; the entire move came from the "ounce" link.
Now suppose a different scenario: the global ounce stays put, but Iran's free-market dollar rate rises 3 percent. The result is again a more expensive gold price in toman, but this time the cause is not the global ounce, it is the domestic dollar. If both of these happen on the same day, their effects add up; if they move in opposite directions, say the ounce rises while Iran's dollar falls, their effects partly cancel out. This is exactly why you sometimes see global gold jump while gold's price in Iran's market barely moves, or the reverse.
In Iran's Market: The Transmission Channel With Today's Numbers
To keep this chain from staying abstract, here are the real numbers from this same report: at midday on Tuesday, 20 Mordad 1405 (11 August 2026), the global gold ounce stood near 4,361.41 dollars, Iran's free-market dollar traded near 187,500 toman, and 18 karat gold in the domestic market was priced near 19,074,000 toman. Plugging those three figures into the formula above, the ounce divided by 31.1035, multiplied by the dollar rate, multiplied by 0.75, gets you close to, but not exactly, the real market price. The remaining gap is what the gold market calls the "premium" (hobab), with the making charge also playing a part; both are covered separately in other Sahmino Academy lessons.
The important point for a reader in Iran is that because the dollar rate is also an independent multiplier in this chain, even when global headlines about gold are quiet, a single move in the currency market is enough on its own to change the price of gold and coin in Iran, just as a move in the global ounce, with no change at all in the dollar rate, does the same thing.
Common Mistakes
- Confusing the ordinary ounce (close to 28.35 grams) with the troy ounce (31.1035 grams); in a back-of-envelope calculation, this mistake overstates the answer by roughly 9 percent.
- Assuming only the global ounce affects Iran's gold price and ignoring the dollar rate; in reality both numbers carry weight independently.
- Reading a jump in the global ounce as a guarantee of an equal-sized jump in the toman price of gold, without checking what the dollar rate did that same day.
Summary
The ounce, or more precisely the troy ounce, is the global 31.1035 gram unit in which gold's price is quoted worldwide, including in London's auctions, and always in dollars. Getting from that global figure to gold's price in Iran's market requires converting it to grams, multiplying by the domestic dollar rate, and adjusting for the relevant karat; the global ounce and Iran's dollar are two independent variables, either of which can move the final price on its own. For the complete formula, including the making charge and the premium, read "Pricing Gold in Iran: From the Global Ounce to the Number on Your Jeweller's Invoice"; for karat and coin types, see "Gold in Iran: 18 Karat, Melted Gold, and Coin Types." Today's ounce and 18 karat gold figures are always live on the gold ounce price page, and the full Sahmino Academy catalogue is at the Learn hub.
This lesson continues from "A Map of Global Markets."
