Gold and Silver Prices

Current Precious Metals Prices

Historical Prices of Gold and Silver

The price of gold today is determined by supply and demand as it is traded through large global markets of physical metals (from raw ore to refined bars and coins), and even contracts for future delivery at a specific price.

In the US, a market-determined price is a relatively recent phenomenon. For most of US history, government set the price at which gold could be converted to paper currency. In the early years of the republic, the exchange rate was $19.39/ounce. In 1834, it rose to $20.67 and stayed at or near that mark until 1933, when Franklin Roosevelt increased it to $35. Roosevelt also banned the private ownership of gold bullion by US citizens, and canceled the convertibility of paper dollars to metal, so the price only reflected what foreign buyers paid. Finally, in 1972, President Nixon closed the "gold window"; citizens could own gold again but foreigners could not redeem paper dollars for gold through the government (though they could still use those dollars to buy gold on the open market). The gold price was allowed to freely float.

Silver, by contrast, has always had a market-determined price, and its price history is marked by the sharp fluctuations you’d expect absent any constant-price peg determined by the federal government.

What Are the Historical Highs and Lows of Gold and Silver Prices?

All-Time Highs and Lows for Gold & Silver

(Based on London PM Fix Prices)

Annual Highs and Lows for Gold & Silver

Price Predictions for Gold and Silver

Gold and silver prices don’t rise or fall for the same reasons that stock prices do. In general, gold is inversely correlated to the stock market. Precious metals are a historical safe haven, so if investors get skittish about stocks or fearful of what could happen in that market, they tend to buy gold, pushing its price higher. Conversely, if investors are confident that the stock market will rise, that’s where they’ll invest the gold price tends to fall.

Gold and silver performance depends on more than just the stock market, though. Since precious metals are, among other things, a store of value, their prices tend to rise when times are tough, whether those tough times be economic, monetary, financial, or geopolitical in nature. History also shows they perform well when inflation climbs.

In addition, gold and silver are money, and a hedge against financial catastrophe. If worse comes to worst — if there is hyperinflation and a loss of confidence in fiat currencies — precious metal coins will be one of the only methods of payment nearly universally recognized as having real and permanent value, and are likely to be accepted in exchange for goods and services.

Predicting gold and silver prices thus depends on a number of factors, but primarily they involve one’s outlook for the future. The research we’ve done at GoldSilver shows that financial risks are high right now, and if any of them lead to a crisis, investors will seek the refuge of gold and silver and drive their prices higher. And the worse the crisis, the higher their prices are likely to go.

How High Could the Price of Gold Go?

Gold has served as a safe haven for literally thousands of years. So if fear is high or a crisis develops in the markets or economy, investors instinctively rush to gold, and the demand pushes its price higher. Believe it or not, gold soared over 2,300% in the 1970s, because there was a series of crises underway — two recessions, an energy embargo, runaway inflation, and sky-high interest rates. Combined, they served to push gold’s price to its inflation-adjusted all-time high.

We think there are a multitude of outsized current risk factors again, and that a series of crises is headed our way — if so, gold and silver prices are likely to hit new all-time highs. A five-figure gold price is possible if the crises are severe enough. Here’s what a dozen of the largest investment banks predict for gold prices in 2018.

How High Could the Price of Silver Go?

Silver has actually circulated as currency more often than gold. While silver has numerous industrial uses and can thus be affected by economic activity, it too has served as a safe haven during periods of financial crisis. It will perform in tandem with gold. Mike Maloney thinks silver could ultimately hit the high three figures.

Common Questions About Precious Metals Prices

What Is the "spot price?"

The spot price is typically the base price of one troy ounce of a metal in any form. Any transaction you make in the gold market will be based upon the spot price.

Any quote of the spot price of gold in grams or kilos is typically just a conversion of the value in ounces, and not a separate trading market. It’s the same for other currencies, like the euro or yuan, which are usually calculated using current foreign currency exchange rates.

Any buying and selling you want to do will be based upon the spot price at the moment of purchase or sale. Purchases are based on the “ask” price, and sales are based on the “bid” price.

What’s the Difference Between an Ask Price and a Bid Price?

Spot usually refers to the “bid” price you see listed — which is the most recent market price at which buyers are willing to purchase. The “ask” price is the most recent market price at which sellers are willing to sell.

How Is the Spot Price of Precious Metals Determined?

The spot price is based on trading activity in the futures markets. Precious metals trade just like stocks and other securities do. “Spot price” reflects the current trading price.

In the US, the COMEX is the primary exchange that sets the price, which fluctuates throughout the trading day. This is the price that filters down to the retail level and is quoted to you when you go to buy from a dealer, depending on what buyers and sellers are doing.

COMEX transactions involve the buying and selling of futures contracts. In the case of gold, each of them represents 100 ounces of the metal. For silver, contracts are for 5,000 ounces (although they may be split into five segments of 1,000 ounces each). It is possible for individuals to buy physical gold or silver on the Comex, but the size of the contracts puts them out of the reach of all but the most affluent buyers. In addition, taking delivery of metal from the Comex is a complicated procedure. Thus nearly all of the trading on the exchange results from major financial institutions making speculative moves or hedges, using large contracts as the vehicle.

So, oddly, the price you will pay for physical gold at any given time is driven by a market where nearly 100% of the participants are simply trading paper and have no interest in purchasing physical gold. The spot price is quoted in US dollars.

What Is the London Fix Price?

Gold trades around the world and around the clock. Some of the larger exchanges include New York, London, and Shanghai. Gold trades from 6AM to 5:15PM Eastern Time, Sunday through Friday (the market is then closed for 45 minutes on weekdays). The spot price constantly fluctuates during trading days, depending on what buyers and sellers are doing.

The London market provides a “fix” price twice per day for gold – at 10:30 a.m. and 3:00 p.m. (London GMT) – and once per day for silver (during business days). It is designed to establish a price for settling contracts between members of the London bullion market, but it informally provides a recognized rate that is used as a benchmark for pricing the majority of gold products and derivatives throughout the world's markets.

The London fix on any given day is determined through a conference call among 12 of the world’s largest private banks. It is then used by institutions, producers, and other large market participants to price contracts.

Retail customers like you and I cannot buy and sell based on the fix price, only the spot price (plus a premium).

Can You Buy Gold at the Spot Price?

Not likely. As noted, the spot price is determined by the action in the futures market. It is for “unfabricated” metal (i.e., 400-oz. bars called “Good Delivery Bars”). There are value-added costs involved in transforming molten metal into a gold or silver coins, small bars, or jewelry. So premiums are charged along the way: by the refiner, the fabricator who manufactured the product, and the dealer who procures and sells the product.

Your cost will depend on the form of gold you buy.

What Is a "Premium?"

A premium is the amount over spot price that you pay. It is the sum of the additional fees charged to consumers for the services of refining, molding, fabricating, and handling precious metals.

The lowest-premium items (and therefore the least expensive by weight) are bars, which can be either poured or stamped. Coins and rounds carry slightly higher premiums, since they have more intricate designs and are always stamped. Gold jewelry tends to carry the highest premiums, given the craftsmanship involved (though you can buy “bullion jewelry” that is comprised solely of gold and avoids the high markup of most artisanal jewelry).

All dealers charge a premium over the spot price. Here’s how to find a reputable dealer with competitive premiums, along with advice on what to buy.

How Does the Gold Market Differ From the Stock Market?

The stock market (NYSE, NASDAQ, etc.) involves the trading of stock, the transfer of shares from sellers to buyers. For the most part, buyers want to own that stock in their account until they sell it for a (hopefully) higher price. This holding period can be measured in seconds, decades, or any time period in between.

The gold market, as noted, is a futures market. Buyers and sellers trade contracts for the right to buy or sell 100-oz. lots at a fixed future price. Nearly all contracts are “zeroed out” by the end of the trading day, meaning almost no one ends any given trading day with contracts that leave them expecting the physical delivery of gold. Very little physical metal changes hands via the futures market.

Further, there are the terms “long” and “short,” which can be a cause of confusion for novice investors. In the stock market, you are “long” if you own the stock. You make money when the price goes up and you lose money when the price goes down. If you are “short” a stock, you borrow someone else’s shares and sell them, as if you had owned them. You make money when the price goes down and you lose money when the price goes up.

Eventually, you must buy those shares back in the open market and return them to their original owner.

In the gold market, it is not a matter of borrowing. You are “long” if you buy a contract, “short” if you sell one. Someone must take a long position and someone else must take a short position for every contract traded. At day’s end, the longs and shorts merely settle up, almost always for cash, unless a contract is rolled over to the next day, which is possible.

What Factors Can Make the Spot Price to Go Up or Down?

Many factors influence the habits of buyers and sellers of precious metals. Silver’s price tends to be more influenced by industrial demand, due to the many applications for which it is used (and used up, so that it must be replaced). Gold has some industrial uses, but is overwhelmingly purchased for investment (and thus rarely used up). The catalysts that have the greatest impact on spot prices are:

• The US Dollar - The dollar and gold tend to be inversely correlated (when the dollar rises, gold falls, and vice versa). While the behavior of any currency can impact gold prices, the US dollar does so most directly since gold is primarily priced in dollars.
• Commodities - Gold is more "money" than a commodity, but since it has industrial and jewelry applications, the price can be impacted by how commodities, as a sector, are performing in general.
• Inflation - Known as perhaps the greatest inflation hedge throughout history, gold tends to rise not only during periods of actual inflation, but also when inflation is merely anticipated.
• Interest Rates - Gold and interest rates are generally inversely correlated (when rates rise, this is generally thought to be negative for gold). However, the “real” rate (prevailing interest rate minus inflation) is more important than the nominal rate itself.
• Stock Markets - Gold and the stock market are also inversely correlated. When investors are excited about stocks, they tend not to buy gold. When the stock market is falling and they’re fearful, they tend to buy gold.
• Central Banks - The activity of central banks (from money printing to buying or selling gold) can influence gold prices. Selling, however, has been circumscribed for many years by the Central Bank Gold Agreement, which is revised every five years. We are currently under the 4th CBGA, which expires in May 2019.
• Crisis - In virtually any type of crisis — from a terror attack to political upheaval to a recession — gold tends to be viewed as a safe haven. An event or trend that causes fear in investors often pushes gold prices higher.
• Manipulation - This is always a hot topic. See below.
• Silver - Silver normally rises and falls in tandem with gold. It is affected by the same factors listed above, but not to the same degree. Though useful as money for small transactions, silver is extremely bulky compared with gold, and has many more industrial applications, so it typically doesn’t play the same reflexive “safe haven” role (at least the same degree) that gold has for millenia.

Why Do People Say the Price of Gold Is Manipulated?

The short answer: because it is. A short answer, however, may not be a simple answer, and that’s the case here. Many, many words have been written about manipulation of the gold price. There is far too much available material to hit more than just a few of the high points.

The short answer is correct because ALL markets are manipulated, according to the most basic definition: trading with the intent of influencing a price — and succeeding. Such an effort may be illegal, as with the LIBOR rate-fixing scandal. Or it may be legal, such as George Soros’s attack on the British pound that made him a fortune. Or it may fall into the gray area in between, such as when short sellers stage a coordinated attack on a company’s stock price.

The problem with assessing gold manipulation is that a very small number of big investment banks (known as “bullion banks” because they hold large amounts of physical metal) control price action in the futures market. They regularly write enormous contracts, for the acquisition or disposal of gold, that are never intended to be exercised. As explained above, these contracts are either “longs” (offers to buy) or “shorts” (offers to sell). At the end of the day, hardly any physical gold actually changes hands, yet the trading of these paper contracts can have a profound influence on gold’s spot price.

These big banks are in business to make money, period. It is to their advantage to push prices around to ensure that they make a profit. Because of their size, and the size of their contracts, they have a huge impact on the supply/demand equation, where the buyer of 10 coins from his or her local dealer has none.

The bullion banks create trends. If they are buying lots of contracts, other big institutional buyers like hedge funds will follow their lead, moving the price up. And vice versa. The banks have a major advantage here, because they also generally hold the big funds’ gold accounts. So they know what their clients are doing and can place trades with or against them. This kind of trading — known as “front-running” — is illegal in the stock market, It is legal with precious metals.

To summarize, precious metals markets are: tiny compared with the stock and bond markets, very thinly regulated, dominated by a small number of players, and all but opaque. Small wonder that price manipulation is a regular occurrence.

What all of this means is that it’s suicide for small investors to try to make money on short-term bets in the gold market. The big players have stacked the odds heavily against you. Nevertheless, none of it should deter anyone from buying gold. Whenever real consumer demand for the physical metal rises — as we believe it will going forward — the price will rise along with it, no matter how much paper contracts might be manipulated.

One final note. There is a difference between manipulation and a conspiracy. There are people who believe that the bullion banks (in addition to serving their own interests) manipulate the gold price in collusion with the federal government. Washington, the argument goes, does not want gold to go to the moon because that would expose the dollar for the shaky fiat currency that it is.

So the feds use the banks’ power to suppress the price. We are open to but skeptical about this viewpoint. If you’d like to learn more about the alleged conspiracy, the main source is the Gold Anti-Trust Action Committee (GATA).

What’s the Difference Between an Ounce and a Troy Ounce?

The troy ounce is the standard unit of measurement used for precious metals like gold and silver. A troy ounce, when converted into grams, is equal to 31.103 grams, which is heavier than the traditional ounce, equal to 28.349 grams.

A troy ounce is approximately 10% heavier than a regular ounce. An avoirdupois ounce, or traditional ounce, can be converted into a troy ounce by simply dividing it by 0.91. However, for every troy pound, there are only 12 troy ounces, making a troy pound lighter than a regular pound, which is 16 ounces. It can be confusing, but this is the standard for measuring precious metals like gold and silver.

What Is the Gold/Silver Ratio and Why Is It Important?

The gold/silver ratio is a calculation meant to serve as an indication of divergence between the market value of the two metals.

To calculate the gold/silver ratio, simply divide the price of gold by the price of silver.

Gold has always been more highly valued than silver, but as each metal fluctuates in price, the ratio between the two also changes. A gold/silver ratio of 80 or more has historically served as a reliable signal that the price of silver is about to rise or the price of gold is about to fall.

In modern times, the ratio has mostly remained between 50 and 80. A divergence to either end of that range often signals that a correction back toward the mean may be ahead.

Mike Maloney has discussed the gold/silver ratio’s historical patterns and utility, as well as where the ratio is likely headed.

How Do You Calculate the Value of Your Gold & Silver Bullion?

The value of your bullion holding is easily calculated by multiplying the number of ounces you have by the spot price. But remember premiums and the bid/ask spread. Thus you will pay more than spot if you are buying and will receive less than spot if selling — with small, local dealers generally charging the highest premiums. There will also be shipping and handling fees, and possibly taxes if you buy locally. If you choose to open an account with us, you will have secure online access to our very diverse gold and silver product line, which you can purchase with a variety of payment options (including credit and debit cards, personal check, bank transfer or wire, PayPal, and Bitcoin). You may also sell back at any time. And we offer a price match guarantee.

Where Should I Store My Precious Metals?

Small amounts of gold and silver can be stored in a home safe. For larger purchases, you may wish to have the added security of vault storage. We offer storage both domestically and abroad at a very reasonable cost. Your gold and silver is fully allocated (meaning you, and you alone, own it outright). What you buy is shipped directly to storage, and held in full in your account’s name and title. You may also opt for segregated storage, where your assets will be separately shelved, wrapped, and marked apart from all other assets held at the vault.

Can I Put Bullion in My IRA?

Yes. And we'll help you through the process.