Measurement Standards and How to Calculate Converted Gold Price

“SDRs (Special Drawing Rights) are international reserve assets created by the International Monetary Fund (IMF) and allocated to members to supplement existing reserve assets. The allocation rate to members is in proportion to their capital contributions.” The concept proposed by the IMF is used and inherited in the State Bank of Vietnam laws of many countries. The 2010 Law on the State Bank of Vietnam clearly states: Foreign exchange reserves include: Gold belonging to the State foreign exchange reserves . In Decree No. 24/2012/ND-CP: “ The State Bank is allowed to add gold bars to the State foreign exchange reserves”. Therefore, according to the State Bank of Vietnam’s regulations, gold bars are considered a financial asset. At the same time, Decree 24 stipulates the standards for distinguishing gold bars: “ Gold bars are gold stamped into pieces, stamped with letters, weight and quality indicators and codes of enterprises and credit institutions permitted by the State Bank of Vietnam (hereinafter referred to as the State Bank) to produce or gold bars organized by the State Bank for production in each period.” According to the provisions of Decision No. 1623/QD-NHNN: “The State Bank organizes the production of gold bars with a content of 99.99%, stamped with letters, weight and quality indicators and codes of SJC Company (hereinafter referred to as SJC gold bars).”

1.1.1.3. Measurement standards and calculation of converted gold price

- Measurement standards: in Vietnam, the generally accepted standard unit of measurement for gold is Cay (Luong) or Chi. In which: 1 Cay of gold = 37.5 grams; 1 Chi of gold = 1/10 of a Cay of gold = 3.75 grams.

The world standard unit of gold is the troy ounce (symbol oz), in which 1 troy ounce (ozt) is equivalent to 31.1034768 g.

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• Qos Assurance Methods for Multimedia Communications zt2i3t4l5ee zt2a3gs zt2a3ge zc2o3n4t5e6n7ts low. The EF PHB requires a sufficiently large number of output ports to provide low delay, low loss, and low jitter. EF PHBs can be implemented if the output port's bandwidth is sufficiently large, combined with small buffer sizes and other network resources dedicated to EF packets, to allow the router's service rate for EF packets on an output port to exceed the arrival rate λ of packets at that port. This means that packets with PHB EF are considered with a pre-allocated amount of output bandwidth and a priority that ensures minimum loss, minimum delay and minimum jitter before being put into operation. PHB EF is suitable for channel simulation, leased line simulation, and real-time services such as voice, video without compromising on high loss, delay and jitter values. Figure 2.10 Example of EF installation Figure 2.10 shows an example of an EF PHB implementation. This is a simple priority queue scheduling technique. At the edges of the DS domain, EF packet traffic is prioritized according to the values ​​agreed upon by the SLA. The EF queue in the figure needs to output packets at a rate higher than the packet arrival rate λ. To provide an EF PHB over an end-to-end DS domain, bandwidth at the output ports of the core routers needs to be allocated in advance to ensure the requirement μ > λ. This can be done by a pre-configured provisioning process. In the figure, EF packets are placed in the priority queue (the upper queue). With such a length, the queue can operate with μ > λ. Since EF was primarily used for real-time services such as voice and video, and since real-time services use UDP instead of TCP, RED is generally not suitable for EF queues because applications using UDP will not respond to random packet drop and RED will strip unnecessary packets. 2.2.4.2 Assured Forwarding (AF) PHB PHB AF is defined by RFC 2597. The purpose of PHB AF is to deliver packets reliably and therefore delay and jitter are considered less important than packet loss. PHB AF is suitable for non-real-time services such as applications using TCP. PHB AF first defines four classes: AF1, AF2, AF3, AF4. For each of these AF classes, packets are then classified into three subclasses with three distinct priority levels. Table 2.8 shows the four AF classes and 12 AF subclasses and the DSCP values ​​for the 12 AF subclasses defined by RFC 2597. RFC 2597 also allows for more than three separate priority levels to be added for internal use. However, these separate priority levels will only have internal significance. PHB Class PHB Subclass Package type DSCP AF4 AF41 Short 100010 AF42 Medium 100100 AF43 High 100110 AF3 AF31 Short 011010 AF32 Medium 011100 AF33 High 011110 AF2 AF21 Short 010010 AF22 Medium 010100 AF23 High 010110 AF1 AF11 Short 001010 AF12 Medium 001100 AF13 High 001110 Table 2.8 AF DSCPs The AF PHB ensures that packets are forwarded with a high probability of delivery to the destination within the bounds of the rate agreed upon in an SLA. If AF traffic at an ingress port exceeds the pre-priority rate, which is considered non-compliant or “out of profile”, the excess packets will not be delivered to the destination with the same probability as the packets belonging to the defined traffic or “in profile” packets. When there is network congestion, the out of profile packets are dropped before the in profile packets are dropped. When service levels are defined using AF classes, different quantity and quality between AF classes can be realized by allocating different amounts of bandwidth and buffer space to the four AF classes. Unlike EF, most AF traffic is non-real-time traffic using TCP, and the RED queue management strategy is an AQM (Adaptive Queue Management) strategy suitable for use in AF PHBs. The four AF PHB layers can be implemented as four separate queues. The output port bandwidth is divided into four AF queues. For each AF queue, packets are marked with three “colors” corresponding to three separate priority levels. In addition to the 32 DSCP 1 groups defined in Table 2.8, 21 DSCPs have been standardized as follows: one for PHB EF, 12 for PHB AF, and 8 for CSCP. There are 11 DSCP 1 groups still available for other standards. 2.2.5.Example of Differentiated Services We will look at an example of the Differentiated Service model and mechanism of operation. The architecture of Differentiated Service consists of two basic sets of functions: Edge functions: include packet classification and traffic conditioning. At the inbound edge of the network, incoming packets are marked. In particular, the DS field in the packet header is set to a certain value. For example, in Figure 2.12, packets sent from H1 to H3 are marked at R1, while packets from H2 to H4 are marked at R2. The labels on the received packets identify the service class to which they belong. Different traffic classes receive different services in the core network. The RFC definition uses the term behavior aggregate rather than the term traffic class. After being marked, a packet can be forwarded immediately into the network, delayed for a period of time before being forwarded, or dropped. We will see that there are many factors that affect how a packet is marked, and whether it is forwarded immediately, delayed, or dropped. Figure 2.12 DiffServ Example Core functionality: When a DS-marked packet arrives at a Diffservcapable router, the packet is forwarded to the next router based on Per-hop behavior is associated with packet classes. Per-hop behavior affects router buffers and the bandwidth shared between competing classes. An important principle of the Differentiated Service architecture is that a router's per-hop behavior is based only on the packet's marking or the class to which it belongs. Therefore, if packets sent from H1 to H3 as shown in the figure receive the same marking as packets from H2 to H4, then the network routers treat the packets exactly the same, regardless of whether the packet originated from H1 or H2. For example, R3 does not distinguish between packets from h1 and H2 when forwarding packets to R4. Therefore, the Differentiated Service architecture avoids the need to maintain router state about separate source-destination pairs, which is important for network scalability. Chapter Conclusion Chapter 2 has presented and clarified two main models of deploying and installing quality of service in IP networks. While the traditional best-effort model has many disadvantages, later models such as IntServ and DiffServ have partly solved the problems that best-effort could not solve. IntServ follows the direction of ensuring quality of service for each separate flow, it is built similar to the circuit switching model with the use of the RSVP resource reservation protocol. IntSer is suitable for services that require fixed bandwidth that is not shared such as VoIP services, multicast TV services. However, IntSer has disadvantages such as using a lot of network resources, low scalability and lack of flexibility. DiffServ was born with the idea of ​​solving the disadvantages of the IntServ model. DiffServ follows the direction of ensuring quality based on the principle of hop-by-hop behavior based on the priority of marked packets. The policy for different types of traffic is decided by the administrator and can be changed according to reality, so it is very flexible. DiffServ makes better use of network resources, avoiding idle bandwidth and processing capacity on routers. In addition, the DifServ model can be deployed on many independent domains, so the ability to expand the network becomes easy. Chapter 3: METHODS TO ENSURE QoS FOR MULTIMEDIA COMMUNICATIONS In packet-switched networks, different packet flows often have to share the transmission medium all the way to the destination station. To ensure the fair and efficient allocation of bandwidth to flows, appropriate serving mechanisms are required at network nodes, especially at gateways or routers, where many different data flows often pass through. The scheduler is responsible for serving packets of the selected flow and deciding which packet will be served next. Here, a flow is understood as a set of packets belonging to the same priority class, or originating from the same source, or having the same source and destination addresses, etc. In normal state when there is no congestion, packets will be sent as soon as they are delivered. In case of congestion, if QoS assurance methods are not applied, prolonged congestion can cause packet drops, affecting service quality. In some cases, congestion is prolonged and widespread in the network, which can easily lead to the network being "frozen", or many packets being dropped, seriously affecting service quality. Therefore, in this chapter, in sections 3.2 and 3.3, we introduce some typical network traffic load monitoring techniques to predict and prevent congestion before it occurs through the measure of dropping (removing) packets early when there are signs of impending congestion. 3.1. DropTail method DropTail is a simple, traditional queue management method based on FIFO mechanism. All incoming packets are placed in the queue, when the queue is full, the later packets are dropped. Due to its simplicity and ease of implementation, DropTail has been used for many years on Internet router systems. However, this algorithm has the following disadvantages: − Cannot avoid the phenomenon of “Lock out”: Occurs when 1 or several traffic streams monopolize the queue, making packets of other connections unable to pass through the router. This phenomenon greatly affects reliable transmission protocols such as TCP. According to the anti-congestion algorithm, when locked out, the TCP connection stream will reduce the window size and reduce the packet transmission speed exponentially. − Can cause Global Synchronization: This is the result of a severe “Lock out” phenomenon. Some neighboring routers have their queues monopolized by a number of connections, causing a series of other TCP connections to be unable to pass through and simultaneously reducing the transmission speed. After those monopolized connections are temporarily suspended, Once the queue is cleared, it takes a considerable amount of time for TCP connections to return to their original speed. − Full Queue phenomenon: Data transmitted on the Internet often has an explosion, packets arriving at the router are often in clusters rather than in turn. Therefore, the operating mechanism of DropTail makes the queue easily full for a long period of time, leading to the average delay time of large packets. To avoid this phenomenon, with DropTail, the only way is to increase the router's buffer, this method is very expensive and ineffective. − No QoS guarantee: With the DropTail mechanism, there is no way to prioritize important packets to be transmitted through the router earlier when all are in the queue. Meanwhile, with multimedia communication, ensuring connection and stable speed is extremely important and the DropTail algorithm cannot satisfy. The problem of choosing the buffer size of the routers in the network is to “absorb” short bursts of traffic without causing too much queuing delay. This is necessary in bursty data transmission. The queue size determines the size of the packet bursts (traffic spikes) that we want to be able to transmit without being dropped at the routers. In IP-based application networks, packet dropping is an important mechanism for indirectly reporting congestion to end stations. A solution that prevents router queues from filling up while reducing the packet drop rate is called dynamic queue management. 3.2. Random elimination method – RED 3.2.1 Overview RED (Random Early Detection of congestion; Random Early Drop) is one of the first AQM algorithms proposed in 1993 by Sally Floyd and Van Jacobson, two scientists at the Lawrence Berkeley Laboratory of the University of California, USA. Due to its outstanding advantages compared to previous queue management algorithms, RED has been widely installed and deployed on the Internet. The most fundamental point of their work is that the most effective place to detect congestion and react to it is at the gateway or router. Source entities (senders) can also do this by estimating end-to-end delay, throughput variability, or the rate of packet retransmissions due to drop. However, the sender and receiver view of a particular connection cannot tell which gateways on the network are congested, and cannot distinguish between propagation delay and queuing delay. Only the gateway has a true view of the state of the queue, the link share of the connections passing through it at any given time, and the quality of service requirements of the traffic flows. The RED gateway monitors the average queue length, which detects early signs of impending congestion (average queue length exceeding a predetermined threshold) and reacts appropriately in one of two ways: − Drop incoming packets with a certain probability, to indirectly inform the source of congestion, the source needs to reduce the transmission rate to keep the queue from filling up, maintaining the ability to absorb incoming traffic spikes. − Mark “congestion” with a certain probability in the ECN field in the header of TCP packets to notify the source (the receiving entity will copy this bit into the acknowledgement packet). Figure 3. 1 RED algorithm The main goal of RED is to avoid congestion by keeping the average queue size within a sufficiently small and stable region, which also means keeping the queuing delay sufficiently small and stable. Achieving this goal also helps: avoid global synchronization, not resist bursty traffic flows (i.e. flows with low average throughput but high volatility), and maintain an upper bound on the average queue size even in the absence of cooperation from transport layer protocols. To achieve the above goals, RED gateways must do the following: − The first is to detect congestion early and react appropriately to keep the average queue size small enough to keep the network operating in the low latency, high throughput region, while still allowing the queue size to fluctuate within a certain range to absorb short-term fluctuations. As discussed above, the gateway is the most appropriate place to detect congestion and is also the most appropriate place to decide which specific connection to report congestion to. − The second thing is to notify the source of congestion. This is done by marking and notifying the source to reduce traffic. Normally the RED gateway will randomly drop packets. However, if congestion If congestion is detected before the queue is full, it should be combined with packet marking to signal congestion. The RED gateway has two options: drop or mark; where marking is done by marking the ECN field of the packet with a certain probability, to signal the source to reduce the traffic entering the network. − An important goal that RED gateways need to achieve is to avoid global synchronization and not to resist traffic flows that have a sudden characteristic. Global synchronization occurs when all connections simultaneously reduce their transmission window size, leading to a severe drop in throughput at the same time. On the other hand, Drop Tail or Random Drop strategies are very sensitive to sudden flows; that is, the gateway queue will often overflow when packets from these flows arrive. To avoid these two phenomena, gateways can use special algorithms to detect congestion and decide which connections will be notified of congestion at the gateway. The RED gateway randomly selects incoming packets to mark; with this method, the probability of marking a packet from a particular connection is proportional to the connection's shared bandwidth at the gateway. − Another goal is to control the average queue size even without cooperation from the source entities. This can be done by dropping packets when the average size exceeds an upper threshold (instead of marking it). This approach is necessary in cases where most connections have transmission times that are less than the round-trip time, or where the source entities are not able to reduce traffic in response to marking or dropping packets (such as UDP flows). 3.2.2 Algorithm This section describes the algorithm for RED gateways. RED gateways calculate the average queue size using a low-pass filter. This average queue size is compared with two thresholds: minth and maxth. When the average queue size is less than the lower threshold, no incoming packets are marked or dropped; when the average queue size is greater than the upper threshold, all incoming packets are dropped. When the average queue size is between minth and maxth, each incoming packet is marked or dropped with a probability pa, where pa is a function of the average queue size avg; the probability of marking or dropping a packet for a particular connection is proportional to the bandwidth share of that connection at the gateway. The general algorithm for a RED gateway is described as follows: [5] For each packet arrival Caculate the average queue size avg If minth ≤ avg < maxth div.maincontent .s1 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 15pt; } div.maincontent .s2 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 15pt; } div.maincontent .p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent p { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; margin:0pt; } div.maincontent .s3 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .s4 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s5 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s6 { color: black; font-family:"Times New Roman", serif; font-style: italic; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .s7 { color: black; font-family:Wingdings; font-style: normal; font-weight: normal; text-decoration: none; font-size: 14pt; } div.maincontent .s8 { color: black; font-family:Arial, sans-serif; font-style: italic; font-weight: bold; text-decoration: none; font-size: 15pt; } div.maincontent .s9 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: bold; text-decoration: none; font-size: 14pt; } div.maincontent .s10 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 9pt; vertical-align: 6pt; } div.maincontent .s11 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 13pt; } div.maincontent .s12 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-decoration: none; font-size: 10pt; } div.maincontent .s13 { color: black; font-family:"Times New Roman", serif; font-style: normal; font-weight: normal; text-d
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- Gold purity: Gold purity (or content) is determined on the K (Karat) scale. One Karat is equivalent to 1/24 of pure gold. In Vietnam, gold purity is determined on the gold content of 10. 99.99% gold is equivalent to 24K. The content of 18K gold is approximately 75% of 24K gold.

- The formula to convert international gold price to domestic gold price is expressed as follows: VNGOLD = (INTERGOLD + shipping fee + insurance fee) x (1 + import tax rate) / 0.82945 x USD/VND exchange rate

Simple determination according to gold business units: VNGOLD = Z + m In which: Z is the cost (cost price), m is the profit of gold business units.

1.1.2. Theory of gold market

1.1.2.1. Concept of gold market

Nguyen Thi Thanh Huyen (2015) synthesized and introduced the concept "The gold market is where business activities of gold products take place. The operating mechanism

"The gold market is similar to the commodity market and has similarities with the stock market. The price is determined by market conditions. Due to the special nature of this commodity, the gold market is under the strict control of the central banks of the countries".

However, the scope of the author's research has limited gold to be considered as a financial asset. Therefore, the author proposes the concept: " The gold market is where trading activities of gold products take place - as a financial asset, a part of the currency market. The price is determined by the market, the management of the gold market is an important function of the Central Bank".

1.1.2.2. Gold market classification

a. According to the product type of the market

- Spot gold market: This is the most basic market and is used as a standard for determining the value of other international gold trading activities, where members directly exchange with each other. This is a highly liquid market and operates continuously 24 hours a day, with no geographical limitations. The valuation includes 10 members of the London Bullion Market Association (LBMA). The main centers are London, New York and Zurich.

- Physical gold market: These are the oldest and most popular markets that trade in physical quantities such as gold bars, gold ingots, and jewelry. The world's typical physical gold markets are: London is the largest physical gold market and also the oldest market. Members of the LBMA play an important role in trading in the market; The Shanghai Gold Exchange (SGE) is a large physical gold trading floor with direction and influence in the Asian region; The Hong Kong gold and silver market is an important direction market in the Asian region; The Indian gold market, characterized by the MCx trading floor, with the "gold preference" characteristic of Indians, the physical gold trading floor is always vibrant and has great value.

- Gold futures market: mainly trading of gold derivative products: Futures contracts are gold trading at terms (volume and price) decided at the present time, but effective in the future. The settlement date is the time when the actual exchange has taken place - that is, when the buyer pays and the seller delivers the gold product. Contract terms are usually 3 months or more. Transactions are carried out by selling or buying contracts bought or sold before the settlement date. In this way, organizations can trade in much larger quantities, and accept greater risks for greater profits. The common feature is that the futures market

modern market and synthesized from advances in technology and organization. The world's prominent gold futures exchanges: New York Mercantile Exchange; Chicago Board of Trade (CBOT); Tokyo Commodity Exchange (TOCOM); 2 exchanges (MCX) and (NCDEX) in India; Dubai Gold and Commodity Exchange (DGCX); Shanghai Gold Exchange (SGE).

b. According to the organizational structure of the market

- Decentralized market (Over the Counter - OTC) with representatives: London LBMA, Zunch, New York, Hong Kong (SGE), Singapore, Middle East. The characteristic is that participants conduct transactions with each other according to the agreed price mechanism, transactions are not standardized in terms of value, volume and contract payment term. In the OTC market, the leading role of the market is the founders. OTC transactions, price factors do not necessarily have to be announced to the public, are not subject to strict supervision, thus greatly limiting transparency and risk control. Contracts are paid in the form of direct or indirect payments through the electronic clearing system. The OTC floor trades most gold products, diverse products depending on the needs of participants, in which derivative products have high insurance needs. The liquidity of the OTC market is very large because the products are designed to be suitable and flexible for each subject at each time. The OTC decentralized gold market has the common feature of a high level of development in terms of products, organization and legal system. Participants have enough financial potential to be more proactive in gold transactions to ensure that the expected profit level is always high.

- Centralized market - Trading center with representatives COMEX (USA): largest in scale and highest dominance, CBOT (USA), TOCOM (Japan), MCX (India), DGCx (Dubai), SGE (China), Buying and selling are carried out by auction and order matching. All transactions are conducted in an intermediary manner through the Exchange, closely monitored by the management agency. Transactions between entities are transactions that meet the standards and conditions listed on the exchange. All products are standardized, synchronized and centrally managed through the Exchange, thereby limiting the operational risks and ethical risks of this type of organization.

1.1.2.3. Members participating in the gold market

- Central banks: Gold in central banks' reserve portfolios serves to build confidence in the currency. This confidence would be undermined if the price of gold fell significantly or

significantly increased, so central banks always have the motivation to manage gold prices. Central banks regulate the activities of the gold market with the aim of managing gold prices, thereby demonstrating their power in deciding policies related to monetary policy. Ensuring the best way for the value of domestic currency and avoiding domestic and international economic shocks, as well as ensuring the rights of participants; managing and controlling the gold market according to orientation is one of the important policies of central banks. On the other hand, gold is also considered an investment and storage tool with high ability to fight against inflation and social instability, as well as an important means of foreign exchange reserves.

- Commercial banks: Commercial banks are the main participants leading the market direction. Commercial banks provide a variety of gold financial services in three main groups: gold lending, gold options, and gold futures. In the retail market, they sell physical gold products through a large number of outlets, such as counters in branches. They also serve as a broker or trader in the trading market. Because of their basic function as an intermediary in the financial system, commercial banks also play a role as a financial intermediary of gold.

- Gold trading organizations: These are the largest units, the common feature is that business conditions are strictly regulated. Most of them are organizations with stable economic conditions and a widespread distribution system, not only within a country but also internationally.

- Gold Exchange Traded Funds (Gold ETFs) : Gold ETFs provide diversified products to investors based on changes in gold prices. This allows investors to benefit from fluctuations in gold prices without owning the physical asset. Major gold investment funds include: SPDR Gold Share Fund (GLD; iShares Gold Trust (IAU); ETFS Physical Swiss Gold (SGOL); PowerShares DB Gold ETF (DGL); VanEck Merk Gold Trust (OUNZ);…

- Individuals investing in gold: People play the role of both gold buyers for the purposes of storing, investing, or consuming jewelry, and gold sellers. During periods of high gold prices, people tend to sell gold to realize profits from their investment activities.

1.1.2.4. Gold market products

- Physical gold products: Physical gold is a popular and traditional product. As strong currencies lose value, more and more people buy gold to preserve value.

Gold bars, gold bullion: are products standardized by the purity of gold; the forms of existence can be diverse, such as bars, pieces, or bars, but their quality meets the prescribed conditions. Gold bars, gold bullion have very high liquidity.

Vaulted Gold: Vaulted gold is gold bullion.

kept in vaults of professional banks.

- Banking product group

Gold Deposit: This is a classic product group and has been maintained until now. How it works: Customers deposit gold in a commercial bank for a predetermined period, the commercial bank will issue a deposit certificate, when the maturity date comes, the commercial bank will pay interest to customers in gold at a fixed or agreed interest rate.

Gold Loan: The mechanism of this product is that the borrower mortgages his gold (in the form of jewelry, gold bars, coins, etc.) to the lender (commercial banks or non-banking financial institutions - NBFCs). The lenders have appraisers who evaluate the gold based on its weight, purity and other recognized gold standards. The lender will provide the loan to the borrower at an agreed percentage of the value of the mortgaged gold (usually 70-80%).

- Trading product group

+ Spot products: This is a basic product, investors use idle money at time T + 0 to buy gold for storage. The risk is very low but the initial investment fee is high.

+ Forward product group: Future Contacts; Swaps or Forward Swaps; Outright Forward

+ Option product group : represents the purchase or sale of the right to buy or sell, not the complete, uninterrupted purchase or sale. Gold is the subject of the option called the underlying asset. In case the seller chooses to sell, or allows the buyer to choose the right to buy the underlying asset, this option is called a call option. If the seller chooses to give the buyer the right to sell the underlying asset, it is called a put option.

- Margin product group: Investors authorize Gold ETFs or professional investment organizations to obtain expected profits.

has been committed in advance. This form usually only appears in gold markets with developed organizational structures and diverse gold account products.

1.1.3. Factors affecting gold prices

1.1.3.1. Impact of market supply and demand on gold prices

- Impact from the gold supply side: The gold supply is mainly divided into mined gold, recycled gold and gold sold by central banks, of which the gold mining industry accounts for a high proportion. The global gold volume is defined as the total

89,000 tons, and its reserve holdings are 77,000 tons (Blose, LE, & Shieh, JC, 1995). Recycled gold accounts for ¼ of the total international gold supply. Jewelry is the main source of recycled gold. Central banks regulate their foreign exchange reserve portfolios through gold purchases and sales (IMF, 2013).

- Influence from the gold demand side: The demand for jewelry accounts for about 50% of the total market demand and is closely related to the income level of consumers (Batchelor, R., & Gulley, D., 1995). The demand for gold for industrial production accounts for about 10% of the total market demand, especially high technology. In addition, gold is also considered an investment asset against currency devaluation. (Davidson, S., Faff, R., & Hillier, D. 2003).) During the economic recession, the value storage function of gold is further demonstrated in the sudden increase in gold purchase decisions of investors (Narayan, PK, Narayan, S., & Zheng, X. 2010; Wang, KM, & Lee, Y. M, 2011).

1.1.3.2. Impact of economic growth (GDP)

When a country's GDP grows too fast, it stimulates the demand for gold for industrial development and at the same time, personal gold hoarding appears, leading to an increase in gold prices. In the case of economic recession, the government may choose to reduce interest rates to create momentum to stimulate the economy, thereby increasing money supply leading to increased inflation, and the value of the domestic currency weakens, people will turn to holding gold to pursue the preservation of asset value. (Bernanke and Blinder, 1998). In addition, the " wealth effect" in Asian countries, gold jewelry is purchased at a large value as an investment (Batchelor, R., & Gulley, D. 1995).

1.1.3.3. Inflation

Inflation means that the amount of money in circulation exceeds the demand, leading to currency depreciation and a continuous increase in the prices of goods. (Taylor & Hall, 1993). In the long run, although inflation is always considered an indicator of how the economy is managed,

Central banks always try to devalue their currencies carefully, along with measures to control inflation, which will have the effect of promoting economic development in the case of a lack of effective demand. After the abolition of the Gold Standard, gold was recognized as a special monetary asset. Devaluation of the currency causes the nominal price of goods, including the price of gold, to increase steadily over a long period of time (Abel & Bernanke, 2005). In the short term, the impact of inflation on gold prices is determined by the level of inflation. (Baur, DG, & McDermott, TK, 2010) When there is hyperinflation or signs of economic risk, gold is hoarded by consumers to protect the value of their wealth, causing the price of gold to increase sharply in a short period of time. (Bialkowski, J., Bohl, MT, Stephan, PM, & colleagues, 2015).

1.1.3.4. Interest rate

Interest rates are considered one of the important monetary policy tools of a country. When the economy grows hot and inflation increases, central banks will use the interest rate tool to adjust interest rates and consumers choose savings with higher interest rates for future consumption. Compared to other investment tools, people hold gold to preserve value and expect to make profits due to the difference in gold prices at different times. In this case, interest rates will become the opportunity cost of holding gold, so the relationship between real interest rates and gold prices tends to be inverse (James Ross McCowon, John R. Zimmerman, 2006). From another perspective, interest rates have an important impact on the money supply. Increasing interest rates leads to a decrease in the money multiplier, reducing the money supply. Then, the purchasing power of the domestic currency is increased, the converted gold price decreases and vice versa (Cheung Haywood, 2014).

1.1.3.5. USD exchange rate

Sjaastad, L.A., & Scacciavillani, F. (1996); Larry A. Sjaastad (2008); Apergis,

N. (2014); Hau Le Long, Marc JK et al. (2013) argued that the USD exchange rate is one of the important factors affecting the gold price. The main impact of the USD exchange rate on the gold price comes from the actual supply and demand of gold. Because international gold is priced in USD, the depreciation of the USD will directly lead to an increase in the international gold price. According to the classical purchasing power parity theory, the depreciation of the USD implies a decrease in the purchasing power of the USD, leading to the nominal price of gold in USD being lower than the real value, stimulating the demand for gold storage and pushing the gold price up to a nominal price equal to the real value. The depreciation of the USD creates expectations of corresponding inflation, combined with psychological factors that create momentum for investors to sell USD and buy gold (seen as a financial asset). Thereby leading to a decrease in the value of the USD in the short term, causing more capital to flow into the gold market and pushing the gold price to increase dramatically in the short term.

1.1.3.6. Oil price

Oil is an important strategic resource for the economic development of all countries including: advanced industrialized countries and developing countries; it is an indicator of the world economic development. Both oil and gold are priced in USD, the main currency that plays an important role in international trade. Therefore, when USD changes, gold and oil prices also change in the same direction. (Ewing, B., & Malik, F., 2013).

1.1.3.7. Geopolitical events such as war, crisis

International political instability caused by wars and major political events also explains the rise in gold prices. When the political situation is unstable, gold acts as a "hard currency" and functions as a "cushion" to prevent risks, encouraging people to buy more gold, leading to an increase in prices. Secondly, when there is international political instability, related factors such as the cost of maintaining stability in the domestic economy during war, social instability and epidemics, investors turn to gold for storage, increasing demand and gold prices.

1.1.4. Impact of the gold market in the market economy

1.1.4.1. Positive impacts

Firstly , besides other financial markets such as stock market, real estate or currency market, the gold market is an important capital circulation channel for the economy. Playing the role of a financial asset, the value of gold is considered financial capital. The function of the gold market helps to regulate and convert idle capital from investors to those in need of capital. In particular, the gold market is considered a global market, a 24-hour market because of the high interconnectivity of the domestic and international gold markets. Therefore, the gold market is an important channel for attracting capital from abroad for the country.

Second , the gold market provides a “safe haven” and “store of value” for central banks and investors (Baur & Lucey, 2010; Baur & McDermott, 2010), especially during economic downturns, financial and political crises. This is a historical function of gold, choosing to invest in gold always brings a sense of security to investors when compared to saving, investing in the stock market, and speculating on real estate products.

Third , the gold market helps to limit risks and add more gold products to investors' portfolios, increasing diversity and flexibility.