The spot price is the current wholesale price of one troy ounce of a precious metal for immediate delivery. It is traded mainly in London and on futures exchanges, quoted in US dollars, and shown in pounds by converting at the GBP/USD rate.
Where the spot price comes from
There is no single official spot price. It is the live price at which banks and large traders buy and sell metal in the wholesale market. For gold, that market is centred on London, where trades are settled "loco London" in vaults in the city, alongside futures trading in New York and Shanghai. Price feeds take the best bid and offer from these markets and update every few seconds.
The spot price is quoted per troy ounce in US dollars. A UK chart in pounds simply divides the dollar price by the GBP/USD exchange rate. This means the gold price in sterling can rise on a day when gold is flat in dollars, if the pound weakens.
Spot price vs the LBMA Gold Price
The LBMA Gold Price is a benchmark set twice a day in London, at 10:30 and 15:00 London time, through an electronic auction run by ICE Benchmark Administration. It is published in dollars, with sterling and euro versions. Contracts and valuations often use it, while the spot price moves all day. See LBMA Good Delivery for more on the London market.
Why you cannot buy at spot
Spot is the price for large wholesale amounts, typically 400 oz bars traded between banks. A retail coin has to be minted, shipped, insured, stored and sold, and the dealer needs a margin. All of that is added as the premium over spot. A dealer's buying price for your metal will usually sit below or near spot, and the gap between the two is the bid-ask spread.
Worked example with fixed numbers
Take a spot price of $2,000 per ounce and an exchange rate of $1.25 to the pound (round figures, not today's prices). Spot in sterling is £1,600 per ounce. A full Sovereign holds 0.2354 oz of gold, so its metal value at spot is 0.2354 x £1,600 = £376.64. Any Sovereign price above that is premium.
Using spot in the UK
Follow the live gold price chart in pounds to see where spot is, then check the ranking of gold coins by delivered price to see how far above spot each dealer sells. Comparing the premium in percent is more useful than comparing shops on a single day's price.
Related terms
Premium Over Spot Bid-Ask Spread LBMA Good Delivery Troy Ounce
FAQ
Who sets the gold spot price?
Nobody sets it; it comes from live trading between banks and dealers in London and on futures exchanges, so it changes throughout the day.
Why is the gold price in pounds different from the dollar price?
Gold is traded in US dollars, so the sterling price is the dollar price divided by the GBP/USD exchange rate and moves with both.
Can I buy gold at the spot price in the UK?
No retail buyer pays spot. Dealers add a premium to cover minting, delivery, insurance and margin, so you always pay something above it.