What is "Spot Price"?

When you buy gold bars or gold coins, the spot gold price directly affects how much you pay for them. Unlike most other commodities, sentiment drives the gold price more than supply and demand imbalances.

When investing in gold, you should factor in the following:

• The risk appetites of other investors
• The level of current or anticipated interest rates
• The strength or weakness of the US dollar

The price of gold is usually quoted in US dollars. However, it’s easy to get a live gold price in any of the world’s major currencies. The relative strength or weakness of individual currencies impacts on how high or low the price of gold is to users of those currencies.

This price is also a reflection of what price gold is being exchanged for in over-the-counter (OTC) markets. If there are more buyers than sellers, then the spot price of gold is likely to rise. If there are more sellers than buyers, the price is likely to fall.