Spot Rate
Also: Spot price, Cash price, Spot rate
The spot rate is the currently valid market price of a precious metal for immediate delivery and payment, also known as the spot price.
The spot rate (spot price) is the price at which a precious metal is traded on the spot market for immediate settlement, that is for purchase, sale and physical or book-entry delivery within the shortest possible time frame (usually two business days, T+2). It is the reference price above all others 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 shown on this site are always the spot rate in real time.
How does the spot rate arise?
The spot rate forms continuously in the OTC market (over the counter) through supply and demand among banks, refiners, central banks, funds and large industrial buyers. For gold and silver, the LBMA sets the so-called LBMA Gold Price fixing twice daily as the official reference value; between fixings, however, the spot rate moves freely.
Spot rate (mid) = (Bid price + Ask price) / 2
Dealer price = Spot rate x fine weight x exchange rate + premium
The dealer buys 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 versus forward price (futures)
| Feature | Spot rate | Forward price (future) |
|---|---|---|
| Delivery | T+2 (immediate) | Fixed maturity month |
| Trading | OTC, 24/5 | COMEX, exchange hours |
| Reference | LBMA, Reuters | CME/COMEX settlement |
| Premium | - | Contango (usually) or backwardation |
If the forward price sits above the spot rate, this is called contango; if it sits below, backwardation.
The exchange-rate influence
Because gold and silver are quoted worldwide in US dollars, the euro spot rate depends on two variables: the dollar spot price and the EUR/USD exchange rate. If the dollar strengthens, the euro spot rate falls, even when the dollar spot price is unchanged. You can find current exchange rates on this site.
Practical significance
- Bars and coins: dealers add a premium (agio) to the spot rate, covering 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: in Ireland a private individual's gain on selling bullion is liable to Capital Gains Tax at 33% after the annual EUR 1,270 personal exemption, with no holding-period relief (see speculative holding period). This is not tax advice.
Key takeaway
The spot rate is the universal yardstick of the precious-metal market: once you understand how it forms and how premiums build on top of it, you can compare offers from different dealers quickly and objectively.