The gold spot price, the live gold price, the gold fix price, gold futures prices – what do they all mean and what’s the difference between them?
When you’re new to investing in gold, you may find yourself confused by the different terms, figures and prices used to explain what’s happening in the market.
By taking the time to understand these key words and numbers, you will put yourself in a better position to make wise investments.
The gold fix price
The gold fix price (otherwise known as the ‘London fix’) is set by the London Bullion Market Association (LBMA) twice per day, firstly at 10:30am then at 3pm.
The gold market operates 24 hours a day, unlike the stock markets, so there is no official closing price each day. The afternoon gold fix price is therefore often used to represent the closing price on any given day.
The auction that determines the fix price twice a day is independently operated by the ICE Benchmark Administration (IBA) and the price is set as the price per troy ounce of gold.
It’s worth noting that firms that use the LBMA gold price commercially will likely hold a license with the IBA. There has been a real push towards transparency and responsibility within the market, something the IBA is working still to uphold.
The live gold price or the gold spot price
The live gold price is what bullion dealers typically use to price the products they have on offer. Also known as the gold spot price, it’s given per troy ounce of the precious metal and is almost constantly changing throughout the day.
The live gold price is essentially what the precious metal can be bought and sold for at this time.
Gold futures prices
Finally, theeFinally, Fin gold futures market is aa public and regulated exchange. Gold futures are contracts that enable a seller and a buyer to lock in a sale now based on the predicted price of gold on a given day in the future. aTrading in gold futures allows investors to take bigger risks and invest more money.
In a gold futures trade, the amount and price of gold are agreed upon now, but the actual exchange won’t happen until a fixed date in the future, leaving plenty of room for market speculation.
During the period in between, the seller will have the opportunity to try and buy back the same amount of gold, whilst the buyer attempts to sell it. This means that, come exchange day, the traders will only need to settle for their gains and losses.