The gold spot price or current gold price is seriously misunderstood by inexperienced investors. Many think it is determined by London Gold Market Fixing Ltd, however it is not! Besides, the websites commonly use the gold real time price, is not same as the gold spot price.
What is the gold spot price?
The gold spot price or gold current price, at which the physical gold can be sold or bought at a specified time and place. In contrast, a gold futures price is in relation to its current spot price and time frame in question. The spot price is calculated according to the most recent average bid price offered by the worldwide professional traders.
Who affects the gold spot price?
The gold spot price is changed every minute. Of course, those factors affecting the gold price (such as bid price, ask price, or fixing price) are also affecting the spot price, such as war, center bank, and supply and demand. Another factor the gold investor frequently neglect is transaction size. The weight of gold is bigger; the gold spot price is more favorable. Thus, in the international worldwide of gold trading, size matters.
What is the difference between the spot price and futures price?
First of all, the two prices are not the same. A futures price, at which parties to a futures contract agree to transact at on the settlement date. It is higher than the current spot price, for it must includes fees of storage and delivery of the gold, also includes finance charges because of the delay payment. Furthermore, the futures price is determined based on the spot price. The money market rate and supply/demand also affect futures price.
Is the gold spot price equal to gold fixing price?
As a new gold investor who may hear the term "gold fixing price" and think it is same as the gold spot price. In fact, it is not true. The gold fixing price is more akin to a momentary spot price, that price is just for the five major banks' most important customers who sale or buy in multiples of 400 ounces gold . Thus, most investors can not buy or sale gold with the gold fixing price.