Silver Spot Price: How is it Determined?


A spot price is the fluctuating market value of a commodity purchased or sold on a commodity exchange under a contract for prompt payment and delivery.

Silver Spot Price today refers to the estimated cost of 1 troy ounce of silver that is ready for immediate delivery before being coined into bullion bars, rounds, or coins. The forward month’s futures contract with the most volume sets the silver spot price. 

“Why aren’t the silver bullion goods on the website priced at the silver spot price?” you might ask. If not the price of silver itself, what is the silver spot price? We have an answer to these frequently asked questions. Complexity can be found when you examine silver spot prices in great detail. The primary financial forces that control the silver spot price mostly do not exchange the actual precious metal; instead, they use derivative contracts and proxies to represent the underlying commodity to determine what the final price of the silver in the physical world will be.

Silver, gold, crude oil, platinum, wheat, corn, coffee, soybeans, cotton, and other goods are examples of commodities. Futures contracts for each of these commodities are available on a number of international exchanges. A combination of contracts priced for the future delivery of a specific commodity makes up the futures price for that commodity.  

The COMEX currently plays a major role in determining changes in the spot price of silver. The New York Mercantile Exchange’s COMEX division continues to be the main futures market for silver, and as a result, it has the biggest impact on the silver’s shifting spot prices in fiat currencies around the world. On the COMEX, silver futures contracts represent the futures price of 5,000 ounces of silver for a hypothetical future delivery date. However, most futures contracts are settled in cash value rather than the actual physical commodity. Today, for every physical ounce of silver bullion that is ultimately delivered in the real world, many hundreds of ounces of digital silver futures contracts are exchanged on the COMEX. Keep in mind the above Deliveries / Open Interest of 0.43%.

Since silver bullion is a physical asset and is regarded as a store of value, you can buy Silver online from Au Bullion’s user-friendly website! At your doorstep, the best Toronto silver bullion and Vancouver silver bullion. The fluctuating spot price of silver bullion is typically influenced by variables such as speculator sentiment, potential price inflation/deflation threats (real or perceived), changing values of digital and paper fiat currencies, variations in government deficits, market/central bank mandated interest rates, geopolitics, and news events.