A spot gold price means current market price or it may be stated that price on the basis of the price of “futures” contracts. Futures contracts are traded on future exchanges operating in a number of countries.
These futures contracts are standardized contracts when it comes to lot size, delivery period between the seller 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 major commodities of country. The commodities may include energy sector like crude oil, natural gas. It could 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 each month of the year. It indicates a contract for delivery of June can be obtained xauusd through out of year. Basic behind to establish future market is allowing 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 used to hedge the change in gold price risk. Hedgers are those who want to minimize their risk against the cost change. Other participants of market are speculator who would like to take risk means the danger which a hedger desires to avoid. By the use of future contract spot price risk can be minimized. Also by the use forward contract spot gold price can be fixed to minimize the danger of price fluctuation of gold in future.
Spot gold price can be determined on commodity exchange market. All of the futures contracts are traded on the commodity exchange. You can find the location gold price from the commodity exchange like COMEX positioned in New York. The COMEX (Commodity Exchange) is leading commodity exchange in the United States for metals. The method of by which spot gold prices on the COMEX is decided has been specified in the NYMEX rule book.
These markets are fully computerized and the information they offer is in real-time. Second by second details 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 referred to as the location month. If you prefer more about the Spot gold price it could be based on the active month calculation. And the closing gold spot price for your day is derived 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 over the last two minutes of closing period that is 1:28-1:30 PM.
Individuals have option to purchase gold from dealer or from exchange. But you will see the difference in spot gold price on the exchange actual prices today for small amounts of gold coins