The Pure Gold Company
When looking into gold investments, you’ll often see gold prices expressed as a “spot price”, but when purchasing gold for investment you may find that prices are higher. So what exactly is the gold “spot price”?
The spot price is the common standard price for a set quantity (usually an ounce) of investment-grade gold. The spot price of gold, like anything else, changes depending on the markets, the economy as a whole, currency values and current events, and may be different in different countries. During market hours these prices often change every couple of seconds, although truly dramatic changes of more than a few pence don’t occur often.
In more general terms, the spot price of a commodity is the price at which a commodity is immediately sold and delivered at the present second. This is in comparison to futures contracts and prices, which specify prices for whatever you’re buying at a future delivery date.
Investopedia explains the concept of a Spot Price here.
Private investors are usually unable to buy gold at the spot price for a number of reasons. Gold at the spot price can only be bought and sold in the form of Good Delivery bars, which are a specific kind of gold bar with specific standards distributed by the professional bullion dealing community, the UK wing of which is the London Bullion Market Association. LBMA members can then deal gold to private investors, who cannot buy gold from the source on their own.
There are some ways to buy as close as possible to spot, however, which those buying gold for investment will need.
Some forms of gold command much lower premiums than others. This varies by dealer, but bullion coins often have higher premiums thanks to the worth of their designs. Aim to buy gold bars or rounds, preferably simple ones without designs (but ensure all the paperwork around them is correct and they are of an investment-grade purity).
While buying gold, ensure you keep up to date with the spot price and potential influencing factors like politics. Major political and economic events will often heavily influence gold price, so pick your moment to buy to make sure you get as good a price as possible.
It’s also important to know the additional costs associated with gold investment. Many gold dealers charge for shipping, handling, storage, credit card use and a dozen other hidden costs besides, so if you’re looking to maximise your investments make sure you know them all and what you’re buying. The Pure Gold Company offers complimentary storage and delivery on many kinds of gold purchase, and will advise you on avoiding these extra costs and what kind of gold investment works best for you.
It’s also a good idea to try and buy in bulk, keep a weather eye out for sales deals and special offers, and try to purchase “used” gold where possible, as prices may be lower than on pristine newly forged gold bars.
Like all bullion dealers, The Pure Gold Company cannot offer gold at the specific spot price. We aim, however, to not only minimise fees and commission charges with our complimentary storage but also to provide a full service to potential gold investors, providing advice, a watertight buy-back guarantee and a convenient buying and selling service that makes it easy to invest, liquidate and make your gold work for you. In addition, you can sell your gold to us at the market spot price when the time comes to liquidate it, ensuring that your investment will work for you as efficiently as possible.
For more information on buying investment gold and spot prices, contact The Pure Gold Company today for consultation and advice on securing your wealth with physical gold.