An area gold price means current market price or it can be said that price on the basis of the price of “futures” contracts. Futures contracts are traded on future exchanges operating in several countries.
These futures contracts are standardized contracts with regards to lot size, delivery period between the seller and buyer. Seller means who deliver the commodity and buyer means who receives the commodity for an amount fixed in future. Futures Exchanges facilitate single point for commercial trade of major commodities of country. The commodities may include energy sector like crude oil, natural gas. It might also include cereals like wheat, corn, and soya beans, and metals like iron, copper, lead and zinc. Also future exchanges deal in gold silver and platinum plus other precious metals.
Depending upon market futures contracts can be obtained for each month of the year. This means a contract for delivery of June can be obtained xauusd through of year. Basic behind to determine future market is allowing commercial producers and consumers to determine some guaranteed prices and also guaranteed method of getting the commodity which can be the topic matter of contract.
Spot price of gold fluctuates depending upon demand and supply. Future contracts are used to hedge the change in gold price risk. Hedgers are those who wish to minimize their risk against the cost change. Other participants of market are speculator who wants to take risk means the risk which a hedger desires to avoid. By the utilization of future contract spot price risk could be minimized. Also by the use forward contract spot gold price could be fixed to minimize the risk of price fluctuation of gold in future.
Spot gold price could be determined on commodity exchange market. All the futures contracts are traded on the commodity exchange. You’ll find the location gold price from the commodity exchange like COMEX situated in New York. The COMEX (Commodity Exchange) is leading commodity exchange in the United States for metals. The process of by which spot gold prices on the COMEX is determined has been specified in the NYMEX rule book.
These markets are fully computerized and the information they offer is in real-time. Second by second details about gold spot price of the futures contract of the active month because it is trading on the exchange is easily available. On the exchange probably the most active nearby month is also referred to as the location month. If you would like more in regards to the Spot gold price it could be produced from the active month calculation. And the closing gold spot price for the day comes from that days trading of the location month futures contract. In New York spot gold price close is calculated as the typical of the greatest and lowest prices of the trades over the past two minutes of closing period which can be 1:28-1:30 PM.
Individuals have option to buy gold from dealer or from exchange. But you can see the difference in spot gold price on the exchange actual prices today for small levels of gold coins