Spot Rate
Also: Spot price, Cash price, Spot Rate
The spot rate is the current market price of a precious metal for immediate delivery and payment, also known as the spot price.
The spot rate (also: spot price) refers to the price at which a precious metal is traded immediately on the spot market – i.e. for purchase, sale, and physical or book-entry delivery within the shortest possible time (usually two business days, T+2). It is the reference price par excellence and forms the basis for bar and coin prices, dealer calculations, and the valuation of gold ETFs and structured products.
The current gold price and silver price on this page are always shown as the real-time spot rate.
How the spot rate is formed
The spot rate is formed continuously in the OTC market (Over the Counter) through supply and demand between banks, refineries, central banks, funds, and large industrial buyers. For gold and silver, the LBMA sets the so-called LBMA Gold Price Fixing as the official reference value twice daily; between fixings, however, the spot rate fluctuates freely.
Spot rate (mid) = (Bid price + Ask price) / 2
Dealer price = Spot rate × Fine weight × Exchange rate + Premium
The dealer buys precious metal at the bid price and sells at the ask price. The difference is called the spread; it covers trading and storage costs.
Spot rate vs. futures price
| Feature | Spot rate | Futures price |
|---|---|---|
| Delivery | T+2 (immediate) | Fixed expiry month |
| Trading | OTC, 24/5 | COMEX, exchange hours |
| Reference | LBMA, Reuters | CME/COMEX settlement |
| Premium | – | Contango (usually) or backwardation |
When the futures price exceeds the spot rate, this is referred to as contango; when it is below, as backwardation.
Exchange rate influence
Since gold and silver are quoted worldwide in US dollars, the local currency spot rate depends on two variables: the dollar spot price and the USD exchange rate. When the dollar rises, the local currency spot rate falls – even if the dollar spot price remains unchanged. Current exchange rates can be found on this page.
Practical significance
- Bars and coins: Dealers add a premium (agio) to the spot rate, which includes minting, storage, and margin.
- Melt value calculation: The basis for the melt value calculator is always the current spot rate multiplied by the fine weight.
- Tax and holding period: Whether a profit from precious metal sales is taxable depends on the applicable tax rules in your jurisdiction. Not tax or investment advice.
In brief
The spot rate is the universal benchmark of the precious metals market: anyone who understands how it is formed and how premiums are built on top of it can quickly and objectively compare offers from different dealers.