The spot price of gold is the current price of one troy ounce of pure gold, without processing into a marketable form or dealer fees. In the US, the spot price of gold is mostly set through New York (Comex). In the UK, it is the LBMA that sets the current gold price per ounce. When those groups are setting the spot price, the final number depends on many factors, including current events, market speculation, market trends, currency values, and more.
The prices that are determined are in troy ounces and during market hours continue to change constantly. Bullion dealers use the gold price as the basis to determine the retail price of gold bars and coins.
Gold as an Investment
Investment in gold can be made in the physical form as well as in paper certificates depending on your preferences. Many private as well as government mints produce gold in marketable forms across the globe to enable investors to take advantage of gold's value. Physical gold can be purchased in the form of coins or bars of various shapes and sizes. Gold bars, for example, can be generally found in sizes starting from one gram to over four hundred ounces. Gold coins, however, are typically found in low denominations such as one ounce or fractional sizes.
Just like other precious metals, gold in any physical form is regarded as a vehicle to protect investors from the volatile stock market and also devaluations of currencies. Another way to invest in gold is to purchase gold certificates. A gold certificate is basically a piece of paper that states that you own a piece of gold that is stored at some other location and is not physically with you. It means that you won’t be able to take physical ownership of the gold that you own.
Even though many people prefer the convenience of purchasing paper gold, others want physical ownership of the gold they are paying for.
Gold Spot Price FAQs
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What does 'spot price' mean?
The spot price of gold (or of any other commodity, for that matter) means that price at which it can be exchanged for cash and delivered at that moment. The spot price differs from that of gold futures contracts which specify the price to be paid at a future date. A simple way to think about the spot price is that it’s today's gold price.
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What is the difference between an ounce and a troy of an ounce of gold when you look at any spot gold price chart?
The ounces that you mostly use in everyday life are called avoirdupois ounces. Gold, however, is measured using troy ounces that are equal to 1.09711 avoirdupois ounces. The spot price of gold, therefore, is the same as the troy ounce gold price. Other precious metals such as silver, platinum, and palladium are also measured in the same manner.
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How to calculate pennyweight gold price and when is
it used?
Troy ounce is the standard weight used for calculating gold prices, but the pennyweight (or dwt) is commonly used for measuring dental gold and gold jewelry. This measurement can also be useful for determining the value of smaller amounts of gold. One pennyweight of gold (or 1 dwt) is equal to .05 troy ounces or ~0.055 ounces. To determine the pennyweight gold price, multiple the price of gold in troy ounces by 20 (the number of pennyweights in a troy ounce).
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How is the spot price of gold determined?
Gold is traded all around the world. Some of the major exchanges where it is traded include New York, Chicago, Hong Kong, Zurich, London, and many more. The COMEX and the CME Group in Chicago are the main exchange platforms that determine the gold spot price in the United States. The spot price of gold is determined using the data collected from the front-month futures contracts on the COMEX. However, if there is little to almost no volume in the front-month futures contract, then the delivery month with the largest volume is used for the determination.
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What are Bid and Ask prices?
The Bid and Ask prices are the maximum and the minimum gold gram prices at which gold can be sold in the market. The buyers are required to pay the Ask price, and the sellers will receive the Bid price for gold. The difference between the bid and ask values is known as the bid-ask spread and the lower the value, the more liquid is the product.
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Can I buy gold at spot price or below?
No, you cannot. The gold spot price is the price of an ounce of .999 gold that is available in the market. However, it does not include the dealers or the distributors’ markup price. It also does not include the mark-ups of the manufacturing or the minting company of gold. The dealers purchase the gold from the company at a purchase price and then mark-up to include their costs and a profit margin. It is the reason why a dealer mostly buys gold from individuals at a lower price than the spot price of gold and will sell it above the spot price. The difference between the dealers' buying and selling price is their gross profit.
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What are the different types of gold bullion?
Gold bullion can be of different forms, but the most common ones are coins, rounds, and bars. Gold coins are manufactured by only government mints and have a certain face value depending on the country of its origin. Countries around the world produce different types of gold coins in different shapes and sizes. Gold bars and round bars are manufactured by private mints and are much easily available than gold coins.
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What are sovereign gold bullion coins?
These coins are manufactured by the governments, and the values of these are simply the face values that are stamped on them. However, many of these gold bullion coins are not used for purchases and thus, have collected numismatic value, meaning that their price will be more than that of the face value. In the U.S., the use of gold use coins is prohibited as currency since 1933. It is the reason why you will find that American Saint-Gaudens Gold coins have a higher value than that of a basic gold bar. Some other popular sovereign coins that sell for a higher premium price are South African Krugerrands, Maple Leaf Coins, American Eagle, British Britannia coin and the Austrian Philharmonics.
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If I am quoted a price of $1320 for one ounce of
gold, how much gold will I get?
If a dealer has quoted you a price of $1320 for one ounce of gold, it means you will receive one ounce of gold bullion for that price, but you will also have to pay the dealer’s profit above that.
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What currency is the gold price quoted in?
In the U.S., gold is traded in USD, and thus, it is quoted in USD. Outside the U.S., the spot gold price is covered into the local currency for ease of the buyers and the sellers.
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Does the price of Gold differ from the gold rate in
other countries around the world?
Yes, the spot price of gold differs in different countries of the world, but only marginally. In fact, you are going to pay almost the same price irrespective of the market. Even though gold has a 24-hours market, its performance is closer to the Forex market than the stock market when it comes to performance. There is always a close relationship between the gold rates of one country to the gold rate of another one at any point in time.
Gold Price Factors FAQ
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What are the different factors that cause changes to
the gold price?
It has been observed that during the periods of high volatility, the price of gold changes rapidly, but during the quiet periods, it remains almost stagnant. Many different factors contribute to these changes; some of them are supply and demand, inflation risks, asset allocation, currency fluctuations, geopolitical risks and more. For many people, gold is a ‘safe haven’ since its price is not affected by any outside entities and it retains its value on its own. It is the reason its demand increases during economic instability or geopolitical uncertainty, pushing its price upwards.
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Is the gold price per ounce too volatile for most
investors?
Gold prices have the potential to become volatile with rapid changes, but mostly, the gold market remains quiet through an extended period. It is the reason why investors consider gold as a good investment for long-term since its price has seen an up-trend in the past decades. When it comes to price, the market does not go straight up or down, and the same goes for gold. Even though gold prices can be volatile, it is not any different from the stock market or other equity.
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Why does gold trade 24 hours per day?
Gold is traded all around the world and in different time zones. By trading 24 hours a day, gold markets allow banks, financial institutions and also retail investors to gain access to the gold community while operating normally in their own time zone. By trading 24 hours per day, gold markets meet the need for constant price discovery created by stock markets running round the clock.
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How often do the gold prices change?
Gold spot prices are constantly changing with every second and fluctuate depending on supply and demand, breaking news and other macroeconomic factors. The gold spot price takes into consideration the different domestic and foreign exchange demands, and thus, the price keeps updating from 6 PM EST to 5:15 PM EST from Sunday to Friday.
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Why is it important to know the past and current
price of gold?
By comparing the current price of gold with the historical price of gold, you can determine if the price of gold is on an uptrend, downtrend or it is mostly static. Based on this information, you can know if it is a good time to buy gold (when the demand is expected to grow, but the price is low at the moment), sell gold (when the price is expected to come down, and the current price is high) or to hold it as an asset for the interim.
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Why is the price of gold lower if I do not use my
credit card?
Gold dealers have to work with tight margins. Since the spot prices of gold are commonly known, there is no way that dealers can put high markup prices on their gold especially investment grade bullion and sell them. If you pay using a credit card, the dealer will have to pay a certain fee to the credit card company. The dealers will be required to add their fees to their selling price that can push the price higher than that of its competitors. It is the reason why you can get a much better price for gold by paying cash or with a check or bank transfer.
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Is 24 Karat gold the best?
Even though 24 karat gold is the purest form of gold, it is not always the best. Historically, 22 karat gold is considered to be the best because a small addition of other alloy metal such as silver or copper strengthens the coin and reduces the chances of damage. If you are looking to purchase a gold coin that would pass hand to hand, then 24k would be a poor choice.
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What do you mean by gold/silver ratio?
The gold/silver ratio shows the ounces of silver you will need to purchase an ounce of gold. Investors use the ratio to know the metal that is under or overvalued. It also helps them determine if it is a good time to buy or sell precious metal. When the gold/silver ratio of high, it means that silver is the favored precious metal. When the gold/silver ratio is low, gold is the favored one.
Gold Futures, Paper Gold and Gold Bullion FAQs
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What is a gold futures contract?
A gold futures contract is a contract that allows for the sale or purchase of gold at a specific date in the coming future for a certain price. If you purchase a January 2019 gold futures contract, you are buying the right to take delivery of (for example) 100 troy ounces of gold in January 2019 at the price dictated in the contract. The price of the futures contract is subject to fluctuation between now and January 2019 as more information about the likely price of gold on that date becomes available.
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If I buy a gold futures contract, am I buying
gold?
Technically, when you are purchasing a gold futures contract, you will eventually get delivery on that particular contract. However, it is not a common practice as there are only some bullion gold products that make the amount of choice one has limited. Also, you will also have to pay numerous fees and costs when taking delivery at a future date. For these reasons, most gold futures contracts are closed prior to the closing date or are settled in cash.
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Is buying shares of a gold ETF the same as
purchasing bullion?
Even though many people buy gold ETFs, they are only promissory notes. Unlike gold bullion which is a physical asset and which you can hold in your hand, ETFs are only paper assets. Investors who buy shares in an ETF (which, for example, tracks the spot price of gold) do not actually own any physical gold. Also, the two options are priced differently due to numerous factors.
Other Gold Price FAQs
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Is it worth buying a gram of gold?
Any amount of gold that you purchase is worth your money since it has a considerable amount of value associated with precious metal. If you have just started investing, a gram of gold is a good starting point since it is much more affordable and you also get plenty of options.
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Will I get better gold prices per ounce from a local
dealer?
Even though there are high chances that you will get reasonable prices for gold locally, if you are interested in saving money when purchasing gold, the internet is your best bet. Online gold bullion dealers have lower overhead costs than local stores, and they deal in bulk. They are in a better position to provide you lower markup on their gold coins, bars, and rounds. Also, online gold bullion dealers offer up-to-date and live gold prices and other precious metals.
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Do dealers charge a fixed fee over the spot price of
gold?
The markup prices change from dealer to dealer. While dealers may have a fixed price on certain gold products, they might charge more or less on other products. For example, a dealer might sell a gold bar for a fixed $20 fee, while he might sell a graded Double Eagle coin for a premium depending on the demand and scarcity of the coin during that time.
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Does the price of gold go up when the stock market
goes down?
It has been seen that the price of gold has a negative correlation with stocks. Gold and equities often move in the opposite direction; there are also times when they both move in the same direction but at different rates. Many investment experts feel that since it has a correlation to stocks, bonds and other types of investments, they can be an excellent addition to your portfolio.
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Do I need to pay taxes when I purchase physical
gold?
Certain states in the United States have taxes on precious metals such as gold, silver, and other precious metals. When it comes to internet retailers, certain sales taxes and other local taxes would be levied on your purchase depending on how much gold is going for. Before purchasing gold in any form, it is best to find out if you are liable to pay local or state taxes or not.
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How can I calculate how much gold is going for?
You can use a gold price calculator online to measure and calculate the real-time gold price. All you have to do is put in information such as the purity (e.g., 18k, 22k, 24k, etc.), weight unit (e.g., ounce, gram, tola, etc.) and the desired currency (e.g., US dollar, UK GBP, Euro, etc.). The gold calculator will use this information to determine how much gold is worth today.
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Why are prices of gold and silver so different?
The main reason for the huge difference in the prices of gold and silver is perception and demand. Many people believe that it is due to the rarity of gold as compared to silver. However, the fact is that silver is rarer than gold. The main reason for higher prices of gold is that gold is harder to mine and also requires a more complex purification process.
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Is the gold market manipulated by governments?
There are many theories on the internet that claims that the gold market and the gold price is manipulated. While you can do your own research and draw your own conclusions, there are many factors that you need to consider. You need to understand how gold is often valued the highest when other investment plunges. It is the reason why investing in gold such as coins and bullions are often considered to be a safe haven. It also offers an excellent balanced investment portfolio if you are looking to ways to save for your retirement.
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Where can I check the current gold price per gram
for today?
SellYourGold.com is a great source for those who want to know how much a gram of gold is worth today. You can also a gold price calculator to know the current gold price per gram or ounce or pennyweight.
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When is the gold price the strongest?
It is difficult to predict exactly when the gold price will be at its peak. Gold has done quite well even during periods of uncertainty, shifting inflation environments and also during periods of low currency rates. However, historically, there have been some high and low seasonal periods when it comes to determining the high demand for gold. September has been seen as the strongest month for gold because it is during this time that gold dealers start to purchase gold to build their inventories for the holiday season. The next strongest month is January as there is high demand among the eastern nations for gold before the Lunar New Year. The worst months for gold prices are March, April, and June.