What is gold spot price to the inexperienced investor is a misunderstood term. Most investors confuse the live gold spot price, with the gold spot price, and believe me they are two different things.
What is Gold Spot Price
The term gold spot price, is the name given to the current month’s future contract, for the price of gold. To be more specific it is the price for gold right now, or on the spot. On the other side, when people refer to a live spot gold price, people actually mean the current price of gold futures, trading on exchanges such as NYMEX or COMEX.
How Spot Price Is Calculated
In particular, the spot price is calculated according to the most recent average bid price offered by worldwide traders. The gold spot price changes every minute. It is been influenced by supply and demand, central bank policy, war, etc.
The live spot gold price is the price of gold agreed by the two parties at the settlement date. The live gold spot price is always higher than the gold spot price and this is due to charges for storage, transportation, and finance charges, for the delayed payment in relation to the maturity date of the contract. The live gold spot price is also affected by supply and demand, central bank policy, war, etc.