Everyone quotes the spot price, but where does it come from? Here is what spot means, how it moves and why the price you pay is always a little higher.
Short answer: the spot price is the price of one troy ounce of a metal for immediate delivery in the wholesale market. No single person sets it. It comes from trading between banks, dealers and funds, and price providers publish it continuously. Retail coins and bars always cost more than spot.
Large buyers and sellers trade metal in over-the-counter markets, with London a major centre, and in futures markets. Providers gather those prices into a live quote. Different providers can show slightly different figures at the same moment, because they use different sources.
Spot refers to one troy ounce of pure metal in a large wholesale transaction. It does not include the cost of making a coin, packaging it or selling it in small quantities.
Retail prices add a premium over spot for minting, distribution and the dealer's margin. When you sell, a dealer pays you a price based on spot, usually a little below or near it, depending on the product. That gap is the bid-ask spread.
Spot moves with supply and demand, currency changes, interest rates and global events. It changes through the trading day, so any single reading is a snapshot.
Use spot as a baseline. Multiply your fine weight by spot to get melt value, and compare any quote against it. The price per gram calculator turns a per-ounce spot into a per-gram figure.
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