What is the Market Price of Gold?

The price of gold fluctuates constantly based upon activity in the marketplace. The fundamental supply and demand factors feed into the process. As stakeholders in the market buy and sell gold, the price goes up and down.

The most common market price of gold is usually referred to as the “spot price” of gold.

The spot price of gold is the trading price for an ounce of gold ready for immediate delivery.

Individual investors should not expect to be able to acquire gold at its spot price. Gold is available to small investors in a variety of forms, notably coins and bars, which require manufacture and transport to market. The additional cost of manufacture and transportation, result in a price greater than the spot price.

The current spot price of gold is accessible to investors in a wide array of media. For many decades, it has been quoted in newspapers, from The Wall Street Journal to the business section of your local paper. Spot gold is reported on various business television news networks, such as Bloomberg, CNBC and Fox Business Channel. The spot price is also given periodically over the radio waves.

The price of gold is also available from many sources on the internet, including ITM Trading’s web site at ITMTrading.com. ITM Trading provides free current price indications for Gold, Silver, Platinum and Palladium. In addition to current price indications, ITM Trading shows the change from the previous New York market close and the Afternoon London market “fix” (“PM Fix).

The gold market is a market that never sleeps. Gold trades somewhere 24 hours per day, 7 days per week. Active gold markets exist in Chicago, New York, London, Zurich, Istanbul, Dubai, Mumbai, Hong Kong, Shanghai, Tokyo, Sydney and elsewhere. Gold is usually priced in US dollars, but it is often quoted in the local currency in these various locales, and due to changes in the relative value of international currencies, the value, and even direction of movement, of the price of gold can vary from locale to locale.

For instance, during the “Asian Contagion” of 1997-98, the price of gold in many Asian currencies rose sharply, even while it hit multiyear lows in US dollars.

Still, for most Americans, the spot price of gold expressed in US dollars is the ideal gauge of activity in the gold market.

At this point, one might be wondering about the “PM Fix,” often referred to as the “London fix.”

For centuries, London has been one of the world’s financial centers. This was especially true during the prime of the British Empire. Not only did the sun never set on the British Empire, but the sun never sets on the gold market to this day.

For that reason, the London price of gold has always been an important standard for the gold market. Beginning in 1919, the five major members of the London gold exchange met to settle on a mutually agreed upon price of gold at the open and close of the market.

This fixing was suspended during the period from 1939 and 1954 due to World War II and post-war international controls on the price of gold due to the Bretton Woods agreement.

Even today, the price of gold is fixed in London at the open of the market (AM Fix) and the close of the market (PM Fix) by the five largest members of the London Bullion Market Association (LBMA). Those members are Scotia-Mocatta, Barclays, Deutsche Bank, HSBC and Societe Generale. This London fixing is still the primary guide off of which the other gold markets around the world take their cue.