The spot price of gold is the market price for one troy ounce of gold delivered right away, as opposed to at a future date. It is quoted in U.S. dollars per troy ounce and moves all day. Most quotes come from the nearest actively traded COMEX gold futures contract, and the LBMA Gold Price auction in London sets a reference price twice a day.
What "spot" means
In commodity markets, "spot" means a trade settled now. A futures contract is an agreement to buy or sell at a set price on a later date. Gold trades both ways, and the two prices stay close because traders can move between them.
The unit is the troy ounce, which is heavier than the ounce on your kitchen scale. The U.S. Mint lists one troy ounce as 31.103 grams. When you see a gold price per ounce, it always means per troy ounce of pure gold.
Where the number comes from
No single office announces the spot price. Two markets do most of the work.
COMEX futures in New York
CME Group runs the COMEX gold futures contract. Each contract covers 100 troy ounces, priced in U.S. dollars and cents per troy ounce, and the gold delivered under it must assay to at least 995 fineness (99.5% pure). The contract trades electronically nearly around the clock, Sunday evening through Friday afternoon, with a short daily break.
Because that market is so active, most of the "spot gold" numbers you see on financial sites and dealer pages are taken from the nearest active futures month.
The LBMA Gold Price in London
The second source is a benchmark rather than a running quote. The LBMA Gold Price is set by electronic auctions at 10:30 and 15:00 London time, and the price is formed in U.S. dollars. The auction runs in rounds, and when buy and sell orders fall within a set threshold of each other, the round closes and that price is published. ICE Benchmark Administration (IBA) runs the auction and administers the benchmark independently; LBMA owns the intellectual property.
Many contracts, funds and mints use this twice-daily price when they need one agreed number for a day.
Bid, ask and the spread
Any live gold quote has two sides:
- The bid is the price a buyer is willing to pay right now.
- The ask (or offer) is the price a seller will accept right now.
The gap between them is the spread. On the futures market it is usually small. When a website shows one "spot price," it is often the midpoint or the last trade.
Why a coin costs more than spot
Spot is the price of raw gold in large wholesale lots. The coin or small bar you buy has to be refined, struck, packaged, shipped, insured and sold by someone who needs to cover costs. Those costs show up as a premium over spot.
The Royal Canadian Mint describes it plainly: bullion prices change daily with international markets, and a premium is added to cover manufacturing, administration and delivery. Premiums vary by product: small coins, such as a 1/10 oz piece, usually carry a larger premium per ounce than a 1 oz coin, because the striking and handling cost is similar while the gold content is much smaller. Proof and collector coins carry far larger premiums than plain bullion.
Premiums can also rise when demand for physical coins jumps, even if spot is flat.
Why a dealer buys back at or below spot
When you sell gold back, the dealer pays a bid price, often at spot or somewhat below it for common bullion. The dealer has to resell the coin, hold it in inventory while prices move, and earn a margin. The premium you paid when you bought is usually not returned in full.
This is why the round trip has a cost. If you buy at spot plus a premium and sell at spot minus a small discount, gold has to rise by more than that gap before you break even. Gold prices rise and fall, and you can lose money.
How to work out a coin's melt value
Melt value is what the pure gold inside a coin is worth at the current spot price, before any premium. You need two numbers: the coin's pure gold content in troy ounces, and the spot price.
Melt value = pure gold content (troy oz) × spot price per troy ounce
Here is a worked example. The $1,000 spot price below is hypothetical, picked only to keep the arithmetic easy.
| Coin | Pure gold content | Hypothetical spot | Melt value |
|---|---|---|---|
| 1 oz American Gold Eagle | 1 troy oz | $1,000 | $1,000 |
| 1/10 oz American Gold Eagle | 0.1 troy oz | $1,000 | $100 |
| 1 oz Canadian Gold Maple Leaf | 1 troy oz | $1,000 | $1,000 |
Two cautions help here. First, use the gold content, not the coin's total weight. The 1 oz American Gold Eagle weighs 1.0909 troy ounces in total because it is 91.67% gold with silver and copper added, but it holds one troy ounce of pure gold. Our page on American Gold Eagle value walks through that coin in detail. Second, if you only know the weight in grams, divide by 31.103 to get troy ounces.
If a dealer quotes a price above melt value, the difference is the premium. Comparing that premium as a percentage of melt value is a fair way to compare offers across products.
Spot price and a Gold IRA
In a Gold IRA, the metal you buy is priced the same way: spot plus a premium on the way in, and a bid price on the way out. The IRA also has its own costs for the custodian and storage, which our guide to Gold IRA fees covers. Which coins and bars an IRA can hold at all is a separate question with a specific answer in the tax code; see IRA-eligible gold. For the full picture of how the account is set up and held, start with how a Gold IRA works, or get the free Gold IRA Planning Guide.
Frequently asked questions
What is the spot price of gold?
The spot price of gold is the current market price for one troy ounce of pure gold delivered immediately. It is quoted in U.S. dollars per troy ounce and changes throughout the trading day. Most published spot quotes are based on the nearest active COMEX gold futures contract.
Who sets the price of gold?
No single body sets it; buyers and sellers do. The COMEX futures market, run by CME Group, produces a running price nearly around the clock. In London, the LBMA Gold Price is set by electronic auction twice a day, at 10:30 and 15:00, and is administered by ICE Benchmark Administration.
How many grams are in a troy ounce?
The U.S. Mint lists one troy ounce as 31.103 grams, which is heavier than the ounce used for food and postage. Gold prices are always quoted per troy ounce.
Why do gold coins sell for more than the spot price?
A coin's price includes a premium over spot to cover refining, minting, distribution and the seller's margin. Smaller coins and proof coins usually carry higher premiums per ounce. When you sell, you typically receive a price at or below spot, so the premium is mostly a cost you do not get back.
How do I calculate the melt value of a gold coin?
Multiply the coin's pure gold content in troy ounces by the spot price per troy ounce. Use the gold content, not the total weight, since many coins include other metals. For example, at a hypothetical $1,000 spot price, a coin holding one troy ounce of gold has a melt value of $1,000.
Sources
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