Why are gold spot prices different?

At the most basic level, the spot price of gold depends on the balance between supply and demand in the international market. If a lot of people sell or there is a big uptick in mining and manufacturing, the supply of gold increases and the spot price will fall.

Spot price of gold

: (n) the theoretical price of 1 troy ounce of gold available for immediate delivery before being minted in ingots, rounds or coins. The value of spot gold changes daily, depending on the market.

In general, spot interest rates on gold are cheaper than gold futures rates, since there is no need to extrapolate when buying gold in spot. What they see is what they get, without market predictions. Gold futures rates, on the other hand, are more expensive due to storage costs until the delivery date and additional expenses that a supplier may incur. It is often known that negative economic, political, environmental or monetary conditions contribute to the rise in the spot price of gold.

Futures contracts exist to provide commodity producers, end users and price speculators with a way to manage potential and respectively price risk, buy and receive future deliveries of real-world goods, or simply bet on the price of a commodity rising or falling. The increasing interruption in demand and supply is causing a greater schism between spot prices and physical prices. The spot price is usually expressed in gold per ounce, gram or kilo, although the most common format is the price per ounce in U. Even with a clearer idea of what separates the spot price of precious metals from the physical price, you are probably still wondering why there is a difference in price between these metrics.

The fluctuation in the spot price of gold today is still a combination of buying and selling futures contracts in the world's futures markets (mainly COMEX) that represent the underlying price of precious metals in the real world. Spot gold: As the term indicates, spot gold refers to transactions in which gold is bought immediately, that is, the spot price of gold is an important factor in determining whether to buy or sell your current investments. Many people consult gold spot price charts to identify market trends or to determine best buying and selling practices. Moderate risk: The price of gold when delivered could rise or fall, leading to profit or loss scenarios.

This trade discrepancy explains the price difference between the spot price and the physical price of gold. Krishna has a strong interest in gold and decides to buy 10 grams each in the spot market and in the futures market. When you visit the website of an online gold bullion dealer such as JMBullion, you are likely to see the live spot price of gold quoted all over the website. The current price of 1 gram of gold is 5,500 rupees and he pays 55,000 rupees for 10 grams in the spot trade and receives it.