What is spot price?

People often treat “spot” as the price of any gold ring, silver coin or load of copper wire. That shortcut causes confusion. Market quotes describe a defined commodity; a physical item also has purity, form, location, transaction size and processing costs.

What a spot quote represents

A useful price quote answers at least five questions: which metal, what purity or grade, how much, in which currency, and at what time? For precious metals, the familiar quote is commonly currency per troy ounce of fine metal. Industrial metals may be quoted per pound, metric tonne or another exchange-defined unit.

How is the spot price formed?

There is no single room setting one permanent world price. Prices emerge from transactions and quotations across wholesale markets, exchanges and dealer networks. Different metals use different benchmarks. A financial data service may combine or select these sources and display a bid, an ask or a midpoint.

The visible number can change as buyers and sellers respond to currency moves, interest rates, industrial demand, mine supply, inventory, transport constraints, policy and risk. A page showing a quote should therefore identify its source, timestamp, currency and delay.

Bid, ask and midpoint

The bid is a quoted price at which a market participant is prepared to buy. The ask is a quoted price at which one is prepared to sell. The difference is the spread. Some websites display the midpoint between bid and ask, while others display one side. Two legitimate pages can therefore show slightly different numbers at the same moment.

A retail dealer's buy and sell prices usually include additional costs and margins beyond the wholesale bid-ask spread. That is why it is important to compare like with like.

Spot price versus the price of a bar or coin

A finished product normally costs more than its contained-metal reference value. Minting or fabrication, distribution, insurance, financing, inventory, brand and dealer margin can all create a premium over spot. Product scarcity and small unit size may increase it further.

When that product is sold back, the dealer may bid above, at or below spot depending on resale demand and condition. The premium paid at purchase is not guaranteed to be recovered.

Spot price versus a scrap-metal offer

Scrap buyers purchase recoverable material, not an abstract unit of exchange-grade metal. They may need to sort, test, transport, hedge, refine and resell it. The expected recovery rate and time to payment matter. An offer is therefore commonly modeled as a percentage of contained-metal value.

For example, 100 grams of sterling silver is not 100 grams of fine silver. At the nominal sterling standard of 92.5%, it contains 92.5 grams of silver before considering measurement uncertainty, solder, stones or non-silver parts. Use the silver melt value calculator to see each step.

Why prices differ between websites

• One quote may be bid, another ask, and another midpoint.
• One feed may be delayed while another is real time.
• Currency conversion rates and rounding may differ.
• Trading venues, benchmark definitions and vendor methodologies may differ.
• A page may have a newer or older timestamp.
• One page may show a futures contract rather than a spot-market reference.

A difference is not automatically an error. First compare the label, unit, currency, timestamp and source. For an important transaction, record the exact reference used and obtain more than one itemized offer.

Troy ounces are not ordinary ounces

Precious metals traditionally use the troy system. One troy ounce equals exactly 31.1034768 grams. The ordinary avoirdupois ounce used for many everyday goods equals 28.349523125 grams. Entering an ordinary-ounce weight as troy ounces overstates weight by about 9.7%.

Our precious-metal weight converter keeps the two units explicitly separate.

How to use a spot reference responsibly

1. Confirm the metal, currency, unit and quote timestamp.
2. Measure gross weight with an appropriate scale.
3. Determine purity from reliable testing, not appearance alone.
4. Convert the reference price into the same weight unit.
5. Calculate contained-metal value.
6. Separate processing deductions, fees and product premiums.
7. Check collectible, historic or gemstone value before considering melt.

Frequently asked questions

Is spot price what a dealer will pay me?

Usually not. Spot is the starting reference. A dealer's offer reflects what the item is, how readily it can be verified and resold, and the costs and risks of the transaction.

Is the spot price the same everywhere?

Wholesale markets are connected, but a displayed quote still depends on venue, definition, currency, time and data vendor. Physical metal also has location and delivery costs.

Does spot include tax or shipping?

No. A market reference quote does not normally include a retail customer's taxes, payment fees, insurance or shipping.

Can I use yesterday's close?

You can use any clearly labeled reference for an estimate, but a buyer may use a different or more recent price. Write down the timestamp so the comparison remains meaningful.