Stacks of gold coins and various charts aiming to explain why you can't buy gold at spot price

What Does It Mean To Buy Gold at Spot Price


Written by John Rothans

Sep 26, 2017

It's understandable to want to buy gold coins and bars at a great price. This often means buying as close to the spot price of gold as you can, however, these prices can be hard to come by. Why is this and what can you do to buy gold at a price you're comfortable with? Start with U.S. Money Reserve to find out what spot prices really mean and how you can use them to your advantage.

First things first: What's the spot price of gold?

The spot price is the current market price at which gold is bought or sold for immediate payment and delivery, essentially what you would pay “on-the-spot” as opposed to some date in the future. If you could buy raw gold before it was minted into a bar or coin, you would theoretically pay the spot price.

The spot price of gold refers to the price for one troy ounce and is generally quoted in U.S. dollars. Note that a troy ounce is a standard unit of measurement for precious metals. One troy ounce is defined as exactly 31.1034768 grams (1.097142857143 oz.), but you’ll often see gold prices listed as $/oz. without mentioning “troy.”

Spot prices can be driven by a host of factors including market speculation, fluctuations in gold futures, currency values, current events, gold supply, and gold demand. They’re updated every minute and set at different times around the world at markets in New York, Chicago, London, Zurich, China, and Hong Kong (to name a few of the most influential). Just as these factors change on a daily if not hourly basis, so can the spot price of gold.

Spot prices may sound relatively straightforward, but here's the thing. Spot prices do not account for any other costs that may be associated with the design, manufacture, transportation, purchase or sale of a precious metal, including costs like packaging, shipping, handling, or insurance. They also fail to take into account the rarity of certain gold products and their numismatic value.

For example, the price of a gold bar is pretty clear-cut since it takes into account the spot price of gold, the cost of the bar’s production, and perhaps a narrow dealer markup. Gold coin prices can be harder to nail down since prices include where a coin was minted, the overall quantity produced, the condition of the coin, and the coin’s market demand.

In a way, expecting to buy a gold coin or bar at the spot price of gold is like expecting to buy a house for the price of the materials. What about the cost of transporting the materials, the craftsmanship, location, taxes, etc.?

Up next: How are spot prices used?

Precious metals companies use spot prices to help guide product pricing, but gold coins, bars, and bullion can sell for varying amounts. As we mentioned before, a company may take into account the current market supply and demand for gold, local, national, and global economic conditions, as well as the mintage, product type, and relative scarcity of the product in question—all in addition to the spot price of gold.

And finally: Can you buy gold at spot price?

Unfortunately, no. As we mentioned before, buying gold coins or bars at spot price is like trying to buy a house for just the cost of the raw materials. You can, however, buy gold as close to spot as possible by keeping the following tips in mind.

Pick the right gold product for your goals

Start by defining why you're buying gold, as this reason will help you speed up your search and choose between gold bars and coins. Consider how you plan on using your gold, how long you plan on holding it, and how you'll store it. For instance, if transferring cash into another form of legal tender is important to you, then you'll want to narrow your search accordingly to only legal tender gold coins. But if you're looking for fast, high-volume gold diversification, you may head straight for gold bars.

Watch the spot price of gold

Once you've defined why you're buying gold, watch the spot price of gold in comparison to the products you're interested in. Simply bookmark U.S. Money Reserve's gold price chart in your browser and check back regularly. If a gold coin or bar's price is far below the spot price, you may want to question its purity and the company's credibility.

Comparison shop

Take your time with this step. Using the Internet, you can compare precious metals companies and products from the comfort and security of your own home. You'll want to compare apples to apples, since some gold coins are the same from company to company (like a 1 oz. Gold American Eagle Coin), while others are exclusively sold by one company (like a Pearl Harbor Gold Coin). You'll want to look for the best price but also the best benefits.

Account for other benefits

Does the company you're looking at offer more than just the gold you want at a price you like? They should. Let's go back to our analogy of buying a house. Assume you're looking at two identical, similarly priced homes. A seller that's offering a free home warranty and assistance with closing costs is much more attractive than a seller offering a handshake and a pat on the back. Likewise, the best gold companies offer more than just gold coins and bars.

Ask about the costs included in your purchase and what else you're receiving. For example, with U.S. Money Reserve you can also receive a free gold information kit, free precious metals IRA information kit, access to experienced and highly trained Account Executives, one-on-one consultations, fast and secure shipping, and a BuyBack Guarantee.

U.S. Money Reserve's Free Gold Information Kit



Peace of mind. It's not something you'll see listed on your next order, but it's something you'll receive when you buy gold from U.S. Money Reserve. Call 1-844-307-1589 today to start taking advantage of our many free perks and services, like our free gold information kit and free one-on-one consultations.

Trust the right precious metals company

The gold market is in a constant state of price discovery. Sometimes the price of gold moves very little over the course of a week, and other times it takes massive strides over the course of a day. The variety of factors influencing gold prices means that no one person has ultimate authority over the price of gold. The best way to learn more and gain a better understanding of how prices move is to watch current events in tandem with gold prices, which you can do by following U.S. Money Reserve's News Center and Live Gold Prices. You can also call 1-844-307-1589 to speak to a knowledgeable and experienced Account Executive.

As U.S. Money Reserve CEO Angela Koch says, “We specialize in educating customers not only on the gold industry, but the type of portfolios they can use to protect their [assets]. Not many individuals understand the history of the gold market or that gold has been used for thousands of years to back their finances and hedge against market conditions.” At U.S. Money Reserve, we help you understand it all. Call today to learn about gold prices and more!


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