Fixing of the Spot price
The price of 1 ounce of gold can be known at any time, as various websites show you the current price which is also known as the spot price on a live basis. This spot price of gold is fixed on the basis of futures contracts where a number of countries trade in the futures exchanges. These contracts are standardized ones for selling or buying gold or any other commodity.
This helps to facilitate trade in many commodities. The purpose of the futures contract is to allow investors to have fixed and guaranteed prices and also avail a guaranteed amount of the commodity, in this case gold. Many speculators also deal in this kind of futures contracts, in order to take advantage of the price fluctuations, without actually taking delivery of the product.
Stock Exchanges for Gold Price
The stock exchange then publishes the price and also other related data in real time and the companies make the data available to dealers and other brokerage firms through their websites and newspapers, as well as the television. The price of one ounce of gold at any given time comes from some important sources, such as the COMEX which is in New York. It is a part of the NYMEX which is the New York Mercantile Exchange and it determines the spot gold prices. There may be futures contracts for many months of the year, but the exchange takes the most active month into consideration for giving the real time spot price of 1 ounce of gold.
How is the price calculated?
COMEX calculates the daily spot price of one ounce of gold and closes at 1.30 pm EST. This spot gold price is given in US dollars and then it is converted into all the major national currencies, which are available to all the countries as the spot price of that day. It is calculated as the average of the trades during the last two minutes of the closing period on any day. You can also avail of the conversions in the form of price for a gram, kilogram and so on.
Of course, there will be a difference in the spot gold price given by COMEX and the actual price for small amounts such as 1 ounce of gold bars and coins. You can even buy gold contracts from COMEX but this should be done through a broker with a future trading account and one contract consists of 100 troy ounce bars. When the contract period ends, you will get the delivery of the physical gold.
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