Understanding Gold Spot Price
What the number on the screen actually represents, how it gets set, and why your dealer's price is never exactly the same.
Open any financial site and you will see a gold price that changes every few seconds: $4,685.96. $4,686.12. $4,685.44. This is the spot price — the price at which one troy ounce of pure, unalloyed gold can be bought or sold for immediate delivery on the international bullion market. It is the single most important number in the global precious-metals economy, the anchor against which every piece of jewelry, every coin, every bar, and every scrap chain is ultimately valued. It is also a number that almost no one actually transacts at.
This article explains what the spot price is, where it comes from, and why the price you pay at a retail jeweler or receive from a scrap buyer will always be different — sometimes by a small margin, sometimes by a huge one.
What "spot" means
In commodity markets, "spot" means "for immediate settlement" — as opposed to futures, which settle on a specified date in the future. The gold spot price is the price at which wholesale bullion dealers, refiners, central banks, and institutional buyers will transact right now, in large minimum quantities (typically 400-ounce London Good Delivery bars or 1-kilogram bars), with physical settlement in a handful of recognized vaults in London, Zurich, or New York.
The price is quoted in US dollars per troy ounce by long-standing convention. A troy ounce is 31.1035 grams — heavier than a standard avoirdupois ounce. All professional gold pricing uses troy ounces; converting to per-gram or per-kilogram prices is a matter of arithmetic the calculator handles automatically.
Who actually sets it
There is no single authority that "sets" the spot price. The number is the emergent result of continuous trading across several overlapping markets:
The London Bullion Market
London has been the center of global bullion trading for more than two centuries. The London Bullion Market Association (LBMA) oversees a twice-daily auction — the LBMA Gold Price, at 10:30 AM and 3:00 PM London time — that produces the world's most widely cited benchmark. The auction matches buy and sell orders from a small number of accredited participants and publishes a single clearing price each session. Huge volumes of physical gold settle at the LBMA price, so it exerts strong gravitational pull on all other gold markets.
COMEX futures
The Chicago-based COMEX division of the CME Group runs the world's most liquid gold futures market. A COMEX gold futures contract is for 100 troy ounces, settled in a New York-area vault. Futures contracts trade nearly 24 hours a day on Globex, and the most-active near-month contract is the price that ticks on financial news tickers overnight when London is closed. Because futures contracts trade so actively, they are effectively the real-time pulse of the gold market.
Over-the-counter spot markets
Alongside the centralized LBMA and COMEX venues, huge quantities of gold trade over-the-counter between banks, refiners, and large dealers. OTC spot transactions happen continuously and form a price network that, combined with COMEX futures, produces the real-time "spot price" you see quoted online.
The practical upshot: when you see a spot price on this site or anywhere else, it represents the consensus of what the wholesale market believes an immediately-settled troy ounce of London Good Delivery gold is worth, synthesized from active trading in multiple venues.
What moves the price day to day
Gold is an unusual asset because it behaves as a commodity, a currency, and a store of value at the same time. Its price responds to at least five independent drivers:
Real interest rates
Gold pays no yield. When real (inflation-adjusted) interest rates are high, holding gold has a meaningful opportunity cost, and investors shift capital to bonds. When real rates are low or negative, gold becomes relatively more attractive. The correlation between gold and real rates is one of the most reliable long-term relationships in commodity markets.
US dollar strength
Because gold is priced in dollars globally, a stronger dollar makes gold more expensive in every other currency and tends to dampen demand. A weaker dollar does the opposite. Day-to-day gold moves often invert day-to-day dollar moves.
Inflation expectations
Gold has been used as a hedge against monetary debasement for thousands of years. When markets price in higher future inflation, gold typically rallies. This relationship is noisier than the real-rates relationship but meaningful over long periods.
Geopolitical risk
Gold is the archetypal safe-haven asset. Wars, financial crises, sovereign-debt scares, and currency collapses all tend to push gold higher as investors seek portable, apolitical wealth. The magnitude of these moves varies, but the direction is consistent.
Central bank activity
Central banks are large buyers and sellers of gold. Sustained buying by emerging-market central banks — a feature of the last decade — has been a significant structural tailwind. Sales by European central banks in the 1990s and early 2000s were a structural headwind. Individually, these flows are small next to daily speculative volumes; cumulatively, they meaningfully shift long-run price levels.
Why your dealer never pays spot
Retail gold transactions always involve a spread from spot. The spread is not a rip-off — it is how the dealer covers costs, makes a margin, and absorbs refining loss. Understanding typical spreads helps you recognize when a quote is fair.
- Bullion coins (American Eagle, Canadian Maple, Krugerrand): retail premium of 2–8% above spot for standard sizes. Small fractional coins command higher premiums because the minting cost is fixed but the gold content is smaller.
- Bullion bars: 1–5% above spot for one-ounce and larger bars from recognized refiners. Bigger bars have tighter premiums; small bars have wider ones for the same reason as fractional coins.
- Retail jewelry: retail price is typically 2–4× melt value for machine-made chains, higher still for designer or handcrafted work. The spread covers labor, design, retailer margin, and often several layers of distribution.
- Scrap gold buyers: pay below spot — typically 70–90% of melt value — to cover refining loss, refiner fees, and their own margin. See our scrap gold guide for details.
Market hours
Gold trades electronically nearly 24 hours a day from Sunday evening through Friday evening (US Eastern Time), with a short break each day around the COMEX settlement. When US markets are closed overnight, Asian and European trading picks up the baton, so price discovery never really stops. On weekends the market is closed and prices are quoted at the Friday close until Sunday evening.
Using spot price intelligently
Knowing the spot price is only the first step. What matters is how that number translates into the actual value of the specific piece in your hand, in your local currency and karat system. That is what the melt-value calculator does: it takes the current spot price, adjusts for the weight and purity of your item, and converts to your preferred currency and unit. The resulting figure is the raw floor value of your gold — the number against which every offer should be measured.