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What Is the Gold Spot Price and How Is It Set?

Jeff Clark, Senior Analyst, GoldSilver.com 

The “spot” price of gold is based on the price of one troy ounce of gold. It is the price at any given moment for gold on international exchanges.

Spot usually refers to the “bid” price you see listed—which is the price most recently quoted in the market that buyers are willing to purchase at. This is usually lower than the “ask” price sellers are currently seeking.

The spot price is quoted in US dollars, since gold is universally priced in US dollars in markets around the world.

The spot price is based on trading activity in the futures markets. In the US, the COMEX is the primary exchange that where gold is traded and thus where the price is set at any given moment. While trading of actual physical metal occurs on most exchanges, the bgoldulk of trading is done through the use of futures contracts or other derivatives.

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

The London Bullion Market Association (LBMA) also provides a “fix” price twice per day (during trading days). The fix price is a benchmark for institutions, producers, and other large market participants to price contracts. Retail customers like you and I typically cannot buy and sell based on the fix price, only the spot price.

These same processes apply to the silver spot price as well.

Can I Buy Gold At the Spot Price?

No. The spot price is for “unfabricated” metal. There are costs involved to form gold into a coin or bar or necklace, so a premium is charged by the refiner who manufactured the product and by the dealer who procures and sells the product.

Any transaction you make in the gold market will be based upon the spot price. Your cost will depend on the form of gold you buy. The lowest premium items are gold bars. Gold coins have a slightly higher premium, since they have more intricate designs. Gold jewelry is more expensive given the craftsmanship involved (though you can buy “bullion jewelry” that is comprised solely of gold and avoids the high mark-up of most costume jewelry today).

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.

What Makes the Spot Price Move Up or Down?

Ordinary purchasing and liquidation activity, along with speculation, typically make for the minute-by-minutes changes to the spot price.

There are also big picture forces that can influence buyers and sellers. These catalysts tend to have the greatest impact on the gold price:

  • 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 is the most important since gold is universally priced in dollars.

  • Inflation. Known as perhaps the greatest inflation hedge throughout history, gold tends to rise during periods of inflation, including an expectation of inflation.

  • 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 rate itself.

  • Stock markets. Gold and the stock market are also inversely correlated. When investors are excited about stocks, they tend to buy less gold. When they stock market is falling and they’re fearful, they tend to buy more gold.

  • Central banks. The activity of central banks—from money printing to buying or selling physical gold—can influence gold prices.

  • Crisis. Virtually any type of crisis—from a terror attack to political upheaval to even a recession—gold is universally known as a safe haven. An event or trend that causes fear or uncertainty can push gold prices higher.

  • Commodities. Gold is more “money” than a commodity, but since it has industrial and jewelry use, the price can be impacted by how commodities in general are performing.

As you can see, gold is traditionally viewed as a safe haven asset, or a hedge in financial terms, since it often moves in the opposite direction of stock markets.

Keep in mind that the gold market is relatively small compared to other markets, so the price can be more easily impacted by small amounts of money that enter or leave the sector.

What Is the Gold Price Right Now?

You can see the current gold price and watch its daily movements. You can even view historical prices with our interactive chart, along with how it’s performing in relation to other assets.

What Is the Gold Price In My Local Currency?

Since gold is priced in US dollars around the world, the spot price is the same everywhere at any given moment. However, investors in non-US countries can convert the US price to their local currency to reflect its value in that unit of currency. Even though the underlying spot price is the same, at any given time in local markets (such as on a trading website or at a local coin shop) the premium above spot may vary, sometimes significantly.

There have been times where, due to changes in a currency’s value, the gold price in another currency may rise or fall more than the US dollar price—or even move in the opposite direction. In 2019, for example, the gold price hit all-time highs in dozens of currencies, except the US dollar.

Why Is the Gold Price So High?

To those new to the market, the gold price might seem high for just one ounce. But this shows how much value investors around the world put on it. Gold has some use as a commodity—in medicine and as jewelry, for example—but its primary use is as money, as a store of value. This has been its primary use for thousands of years.