If you’re thinking about a gold investment, then it is important to know what the spot price of gold happens to be. Gold is traded during regular business hours in many different countries around the world, which means the 24 hour spot price may be a lot different at the start of a trading day than at the completion of the one before. It also means that the spot price can vary quite a bit over the course of one trading day.
The typical spot price that you’ll find on a stock ticker is the gold price per ounce. For many investors, this price is based on the New York pricing, but other markets, such as London and Tokyo, will also have spot pricing. You can also find spot prices for gold per gram and per kilogram depending on what investment is needed.
Why Is Knowing the Spot Price of Gold So Critical?
Spot pricing can help you know what the trends of gold happen to be on any given day. Most of the time, the spot price of gold is going to hover around a plus or minus $20 over the starting price. When you start seeing increases or decreases beyond this amount, however, then you have the potential of being able to make some money or sell your gold stocks short.
Think about it this way. Let’s say you own 10 ounces of gold right now. You’ve purchased it at the opening spot price of $1,200 per ounce for easy math purposes. Over the course of trading during the morning, you see that gold has increased to $1,400 per ounce because there is a lot of uncertainty in the global market. That means your investment has made $2,000 over the course of the morning! You can then issue a sell order and attempt to take profits.
Then you’ll watch the spot price of gold throughout the day. Maybe there are other investors who saw the chance to take profits as well and so the price of gold goes down. Let’s say it goes down to $1,150 near the end of the trading day. You can then purchase the same amount of gold that you owned at the start of the day and have made $2,500 in total – because you were able to secure the same amount of gold for $500 less than at the start of the day, plus you had the $2,000 in profit taking.
How Often Does This Happen For Gold?
To be fair, the spot price of gold rarely fluctuates as much as in the example above. It’s more of a long-term investment that takes months of watching the price to be able to secure profits like those described above. Then when a sale does occur, it may take several months for the price to come back down. Gold is more of an investment where you are keeping your money in a safe harbor. It’s a form of protection that limits your risks so that you can keep your overall net worth intact.
The spot price of gold is the price that reflects delivery at this very moment in time. It is important to remember that by the time you issue a buy order through your broker, the spot price of gold is likely to change. That’s why prices might vary between what you order and what you actually get. The differentiation is usually not large, but it can be a surprising difference on the .999 pure gold you want to own.