A spot gold price means current selling price or it may be said that price based on the price of “futures” contracts. Futures contracts are traded on future exchanges operating in several countries.
These futures contracts are standardized contracts with regards to lot size, delivery period between owner and buyer. Seller means who deliver the commodity and buyer means who receives the commodity for a cost fixed in future. Futures Exchanges facilitate single point for commercial trade of most major commodities of country. The commodities may include energy sector like crude oil, natural gas. It might also include cereals like wheat, corn, and soya beans, and metals like iron, copper, lead and zinc. Also future exchanges deal in gold silver and platinum plus other precious metals.
Based upon market futures contracts can be obtained for monthly of the year. This means an agreement for delivery of June can be obtained xauusd during of year. Basic behind to ascertain future market is allowing commercial producers and consumers to ascertain some guaranteed prices and also guaranteed method of getting the commodity which can be the niche matter of contract.
Spot price of gold fluctuates dependant on demand and supply. Future contracts are used to hedge the change in gold price risk. Hedgers are those who would like to minimize their risk against the purchase price change. Other participants of market are speculator who would like to take risk means the chance which a hedger wants to avoid. By the use of future contract spot price risk can be minimized. Also by the employment forward contract spot gold price can be fixed to minimize the chance of price fluctuation of gold in future.
Spot gold price can be determined on commodity exchange market. Most of the futures contracts are traded on the commodity exchange. You can find the location gold price from the commodity exchange like COMEX situated in New York. The COMEX (Commodity Exchange) is leading commodity exchange in the United States for metals. The method of through which spot gold prices on the COMEX is determined has been specified in the NYMEX rule book.
These markets are fully computerized and the info they offer is in real-time. Second by second information regarding gold spot price of the futures contract of the active month as it is trading on the exchange is easily available. On the exchange the most active nearby month is also referred to as the location month. If you like more concerning the Spot gold price it might be derived from the active month calculation. And the closing gold spot price for your day comes from that days trading of the location month futures contract. In New York spot gold price close is calculated as the average of the highest and lowest prices of the trades during the last two minutes of closing period which can be 1:28-1:30 PM.
People have option to purchase gold from dealer or from exchange. But you can see the difference in spot gold price on the exchange actual prices today for small amounts of gold coins