Spot Price
Also: Spot, Cash price, Loco London price
The spot price is the current market price for the immediate delivery of one troy ounce of a precious metal - the basis of almost all buying and selling prices.
The spot price (from spot = "on the spot") is the price for the immediate delivery and payment of one troy ounce of a precious metal on the world market. It is the central reference by which dealers, banks and refineries orient themselves - and thus the basis for almost every buying and selling price.
How the spot price arises
Trading takes place around the clock on the so-called Loco London market as well as on futures exchanges such as COMEX in New York. The spot price results continuously from supply and demand and changes by the second. It is usually quoted in US dollars per troy ounce. For the pound price, the current exchange rate GBP/USD is added - which is why the gold price in pounds can rise even though it is currently falling in dollars (and vice versa).
Spot vs. actual purchase price: the premium
You never pay the pure spot price exactly when buying physical goods. On top of it comes a premium (agio) for minting, distribution and dealer margin. When selling, the buying price is conversely usually somewhat below spot. The difference between buying and selling is called the spread. Rule of thumb: on large bars the premium is small, on small denominations and popular bullion coins it is higher.
Spot vs. LBMA fixing
Besides the by-the-second spot price there is the LBMA fixing - a reference price determined twice (gold) or once (silver) daily, by which large transactions and contracts orient themselves. On this page you can switch at the top right between spot and LBMA fix as the data source.
Using the spot price correctly
- You can find current quotations on the pages for the gold price and silver price - live and in the chart.
- The trend over months and years is shown on the historical precious metal prices page.
- The price relationship between the metals is measured by the gold-silver ratio.
In brief
The spot price is the "bare" world market price per troy ounce. Anyone buying physically pays spot plus premium; anyone selling receives spot minus a discount. A glance at both the spot price and the exchange rate explains almost every price movement observed in everyday life.