Almost every reference price for gold is expressed in United States dollars per troy ounce, whatever country the buyer is in. The convention has practical consequences for anyone earning in another currency.
The convention grew out of trade settlement
Commodities that move across borders need a single unit of account so that buyers and sellers in different countries can agree a price without first agreeing an exchange rate.
The dollar took that role across most internationally traded raw materials because of the depth of dollar funding markets and the ease of settling large sums in it.
Gold followed the same path as oil, copper and grain. Nothing about the metal requires dollar pricing; it is a market habit reinforced by the liquidity that habit created.
Local prices are two numbers combined
A buyer paying in another currency faces a price that is the dollar quote multiplied by the exchange rate, plus local duties, taxes and dealer premium.
That means the local price can rise while the dollar price is falling, if the local currency has weakened by more than the metal has declined.
Holders regularly misread this. A headline saying gold has fallen refers to the dollar quote, and it may describe the opposite of what the holder's own account shows.
Currency weakness is part of the appeal
Because gold is priced in a currency other than the local one, it behaves partly like a foreign currency holding for buyers outside the dollar area.
Where a domestic currency has been losing value steadily, a gold holding has tended to preserve purchasing power better than domestic cash savings, even when the dollar gold price was flat.
This is a large part of why physical demand is concentrated in countries with a history of currency instability rather than in those with stable ones.
Hedging separates the two exposures
An investor who wants exposure to the metal but not to the dollar can hedge the currency component, usually through funds that hold forward contracts to offset it.
Hedging is not free. The cost reflects the interest rate difference between the two currencies, and it can be substantial when those rates diverge widely.
Whether it is worth paying depends on whether the currency exposure is considered an unwanted side effect or a deliberate part of the reason for holding the metal.
Alternative quoting is growing at the margin
Several exchanges outside the dollar area now publish their own gold contracts in local currency, giving domestic participants a reference that needs no conversion.
These contracts trade actively in their home markets, but arbitrage keeps them tied to the dollar benchmark once the exchange rate is applied.
The convention has therefore softened rather than changed, and the dollar quote remains the number the rest of the market calculates from.