A spot gold price means current selling price or it may be stated that price based on the price of “futures” contracts. Futures contracts are traded on future exchanges operating in numerous countries.
These futures contracts are standardized contracts in terms of lot size, delivery period between the seller and buyer. Seller means who deliver the commodity and buyer means who receives the commodity for an amount fixed in future. Futures Exchanges facilitate single point for commercial trade of all major commodities of country. The commodities may include energy sector like crude oil, natural gas. It may 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 is available for each month of the year. It means an agreement for delivery of June is available xauusd through of year. Basic behind to establish future market is to permit commercial producers and consumers to establish some guaranteed prices and also guaranteed supply of the commodity that is the topic matter of contract.
Spot price of gold fluctuates depending upon demand and supply. Future contracts are accustomed 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 risk which a hedger wants to avoid. By the utilization of future contract spot price risk can be minimized. Also by the utilization forward contract spot gold price can be fixed to minimize the risk of price fluctuation of gold in future.
Spot gold price can be determined on commodity exchange market. All the futures contracts are traded on the commodity exchange. You’ll find the location gold price from the commodity exchange like COMEX located 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 decided has been specified in the NYMEX rule book.
These markets are fully computerized and the data they give is in real-time. Second by second information about 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 absolute most active nearby month is also known as the location month. If you would like more in regards to the Spot gold price it could be derived from the active month calculation. And the closing gold spot price for the afternoon comes from that days trading of the location month futures contract. In New York spot gold price close is calculated as the common of the highest and lowest prices of the trades during the last two minutes of closing period that is 1:28-1:30 PM.
People have option to buy gold from dealer or from exchange. But you can see the difference in spot gold price on the exchange actual prices today for small levels of gold coins