GOLD & SILVER PRICING
What is spot rate?
The spot gold price refers to the price at which gold may be bought and sold right now in the markets, as opposed to a date in the future. The spot rate can refer to the current price of gold or silver per gram, ounce or kilo. Spot rate charts are historical charts that allow you to see the performance of gold and silver over a given time period and are a great tool to help understand how the market has, and is currently performing.
While the spot rate gives a good idea of the gold price in the market at any given moment, it is rarely possible for customers to buy gold at the spot price due to premiums that needs to be factored in when buying physical gold in retail denominations. We will discuss premiums shortly.
What affects the spot price?
The simplest answer is supply and demand. Where demand is strong and supply is more limited, sellers tend to push up the price of gold. However, if there are more sellers than buyers, then that will tend to push the price of gold down. The same can be said for silver.
Of course, there are many factors that can affect the supply and demand for precious metals. Some of these factors include:
1. Investment demand
2. Inflation or deflation
3. Jewellery demand
4. Currency markets
5. Interest rates and/or monetary policy
6. Geopolitics
7. Equity markets
Did you know?
The spot price of precious metals is updated every 45 seconds.
Premiums
As customer buying gold or silver typically in denominations ranging from a few grams up-to a kilo, there is a cost associated with transforming gold or silver into your chosen bar or coin. The process of refining, transporting, minting and selling physical gold and silver bars all incur a cost which needs to be built into the price that it is being sold on to you to make it viable, just like any other product.
When buying precious metals, this cost is known as the premium.
Here are some quick points to note on premiums:
1.Applied to physical gold and silver
2.Smaller denominations usually have higher premiums
3.Premiums also affected by supply and demand
4.When selling your physical gold to other customers, it’s worth more than the spot value due to premiums
Did you know?
Minted has some of the lowest premiums in the market? We regularly benchmark against the leading online retailers to ensure we are providing our customers with exceptional value for their money.