Bullion Pricing, Delivery and Storage
What is the gold spot price?
The short answer
The gold spot price is the current wholesale market price for one troy ounce of gold traded for prompt settlement. It is quoted internationally in US dollars and changes continuously while markets are open. The rand spot price is that dollar price converted at the current exchange rate. Spot is a reference for raw metal; it is not the price of a coin or bar bought from a dealer.
Spot price in plain English
The spot price is the price at which large quantities of gold change hands between market participants for settlement within a short, standard period. It refers to raw metal of a recognised purity, measured in troy ounces. A troy ounce is slightly heavier than the ordinary ounce used for food, which is why bullion weights always specify troy.
Where the price comes from and why it moves
There is no single official spot price. Banks, trading platforms and data services each publish a live price drawn from trading in the major international markets. Separately, benchmark prices such as the LBMA Gold Price are set at fixed points in the day and are widely used for contracts and valuations. The price responds to supply and demand, interest-rate expectations, the strength of the US dollar, central-bank buying and selling, and general market sentiment.
Why the rand price moves even when gold does not
Because gold is priced in US dollars, a South African buyer is exposed to two prices at once: the dollar gold price and the rand exchange rate. If the rand weakens, the rand price of gold rises even when the dollar price is unchanged, and the reverse is also true. Prices can fall as well as rise, and past movements do not indicate future ones.
What spot does not include
Spot is a reference price for metal only. It excludes the premium for minting and distribution, delivery, storage, insurance and any tax that may apply. A dealer's selling price is therefore above spot, and its buy-back price is usually below its selling price. When you see a spot figure on a website or in a news report, treat it as a guide to the market rather than a price you can buy at.
Knox sets its Krugerrand prices twice each business day, on a morning (AM) price and an afternoon (PM) price.
How Knox handles this
Ready for the next step?
Speak to the Knox team about your situation. They will confirm current pricing, availability and requirements before you decide.
