Spot Price
Also: Spot, Cash price, Loco London price
The spot price is the current market price for immediate delivery of one troy ounce of precious metal — the basis for almost every buying and selling price.
The spot price (from the English spot, meaning "on the spot") is the price for the immediate delivery and payment of one troy ounce of precious metal on the world market. It is the central benchmark that dealers, banks and refineries take their bearings from — and therefore the foundation of virtually every buying and selling price.
How the spot price is formed
Trading runs around the clock in the so-called Loco London market as well as on futures exchanges such as COMEX in New York. The spot price emerges continuously from supply and demand and shifts second by second. It is normally quoted in US dollars per troy ounce. To arrive at the euro price you add the current exchange rate EUR/USD — which is why the gold price in euro can rise even while it is falling in dollars (and vice versa).
Spot versus the actual purchase price: the premium
You never pay exactly the bare spot price when buying physical goods. On top of it comes a premium (agio) for minting, distribution and the dealer's margin. When you sell, the buying price is conversely usually a little below spot. The gap between buying and selling is called the spread. Rule of thumb: on large bars the premium is small, while on small denominations and popular investment coins it is higher.
Spot versus the LBMA fixing
Alongside the second-by-second spot price there is the LBMA fixing — a reference price set twice a day (gold) or once a day (silver) that large deals and contracts take their bearings from. On this page you can switch, top right, between spot and LBMA fix as your data source.
Using the spot price properly
- You will find live quotes and charts on the pages for the gold price and silver price.
- The trend over months and years is shown on the historical precious metal prices page.
- The price ratio between the metals is measured by the gold-silver ratio.
Quick recap
The spot price is the "naked" world-market price per troy ounce. Whoever buys physically pays spot plus a premium; whoever sells receives spot minus a discount. A glance at the spot price and the exchange rate explains almost every price movement you notice in everyday life.