Understanding Gold Spot Price Canada


Gold has been highly sought-after for centuries for countless reasons. This precious metal is a traditional commodity and is extremely valuable in a wide variety of industries. Gold has most commonly been used as jewellery and currency throughout human history. All around the world, gold has been seen as a symbol of wealth and prosperity. Throughout our ancient history, gold has most commonly been used as jewellery and currency by people of high value and status. 

In today’s society, gold is a remarkably popular investment vehicle besides being a symbol of wealth. Investing in gold bullion such as gold coins and bars is an efficient and reliable method to preserve and expand your wealth. Gold’s spot price plays an important role in investing and trading physical gold.

What is a Spot Price?

The spot price for any precious metal represents the exact price of a troy ounce of the metal at an immediate point in time. The spot price is important for gold bullion transactions and trading. Gold purchased in the spot market is for immediate delivery. The spot price for gold is not the same as the future price for gold. Unlike the spot market, when gold is purchased in the futures market, it has a delivery date in the future with a predetermined price. The futures price is typically higher than the spot price for gold. 

How is the Spot Price Determined?

Unlike other physical assets, the price of gold is constantly changing due to several factors. Over-the-counter trading helps determines gold’s spot price. This is the negotiated price between buyers and sellers. The high and low values given for gold’s spot price represent the highest asking price and lowest bid for the day. The London Bullion Market Association is responsible for setting the benchmark price for gold and silver. Benchmark prices, also known as gold fixes, are taken at specific periods during the day. They’re influenced by the gold spot market as well as the gold futures market and are typically set twice a day. Gold’s spot price is essentially an average net value of the estimated future price. It’s based on traded futures and the next month. It is calculated using data from the month nearest to the current date, better known as the front month. It refers to futures contracts traded on the Commodity Exchange Inc (COMEX).

Global market analysts take data from gold’s history as an investment to make predictions for gold’s future in the market. Studying trends in our economy in comparison to gold’s spot price helps economists determine the future of this precious metal.