Exactly what is the gold or silver spot price? What do investors and analysts mean when they refer to the spot price going up or down?
Basically, the spot price refers to the market price of a commodity or good that is sold for immediate cash and delivery. For instance, if someone asks what the spot price of gold is, they are referring to the current price of one ounce of gold. The next step towards a better understanding of the underlying concept of spot price is to consider spot price vs market price. The market price differs from the spot price because it refers to the price where assets could be bought or sold for future delivery (not immediate delivery). The future prices of commodities help to lower and even eliminate the level of risk involved in the investment.
How is the spot price of gold determined? Future contract prices play a critical role, when determining the spot prices of gold and silver, as the spot prices are set only on the “spot months”. The spot-month refers to any specific month involve the actual dealing and trading of gold and silver.
What is the spot price of Gold? The spot price of gold is the current or live price of gold per ounce. It implies that gold could be bought or sold right at this instance and therefore, it is subjected to extreme volatility. This volatility is the product of a plethora of factors that result in gold spot price changes. Firstly, fluctuations in the currency is a major factor for the spot price change as gold is traded internationally. Therefore, a change is the different currencies would lead to variations in spot prices. Secondly, the volatility in the bond and stock markets also affects the variation in spot prices of Gold., Other factors like inflation, demand for jewellery and interest rate can also impact gold spot prices.
What is the spot price of silver? The silver spot price refers to the current price of silver right now. Investors have displayed an interest in silver due to the magnitude of volatility prevalent in the stock market, and silver can be an outstanding way to protect one's investment. Silver is traded in two forms, commonly: paper silver and silver bullion. The silver spot prices are calculated by strict observation of the future prices and hence, they vary constantly.
To conclude, it is important to note that knowing the spot price is key to protecting your investments. It should also be noted that the spot prices for both gold and silver remain the same worldwide.
